The global markets are getting ready for a hectic Thursday US session. First initial and continuous claims data will be announced before the market open. Then, at 20:30 FED chair Powell will talk at the Princeton Economics Webinar. Also today, Biden is expected to reveal his Covid-19 relief package plan.
Initial jobless claims remain elevated over 700k per week since the start of the pandemic. Last week monthly nonfarm payroll change was announced negative for the first time since April. As Covid-19 numbers worsening states start to increase precautions and this affects the already strained economy in a bad way.
Another risk for investors is rising inflation expectations. Yearly CPI has risen to %1.4 and Core CPI remained at %1.6 as yesterday’s data revealed. Inflations expectations are over %2 percent for some time. Rising inflations cause fear of another possible taper tantrum. FED speakers trying to ease the market participants but today Powell’s talk will be especially important for that.
Biden is expected to reveal his stimulus package to ease Covid-19’s economic effects. The markets expect a $2 trillion package which includes:
• Increase of direct payments to $2000 from $600,
• Money help for local governments,
• Extended unemployment insurance benefits.
If Powell and Biden do not disappoint the markets, the dollar may ease a little while EURUSD and Gold may have some gains as well as the stock markets.
EURUSD is moving in a tight zone between 1.2130 and 1.2175. The price only gets out of this zone once this week but the upward move remained limited and reversed from 100-hour MA.
Like EURUSD, gold moves in a nearly $30 range between 1830 and 1863. The price may decide the next direction soon.
S&P has been contracting since last Friday between the uptrend and 3820 resistance. A possible break to upside may cause another bullish attack if the upward trend holds.