• MTS Economic News 20210422

    22 Apr 2021 | Economic News
  

· ECB not ready to change course yet


Market movers today

The main event of the day will be the ECB meeting although no new signals are expected. We look for a broadly balanced growth risk assessment that paves the way for PEPP buying to reverse to around EUR60bn/ month after the June meeting. Lagarde will face questions on the PEPP buying behaviour which up until two weeks ago was underwhelming. Our ECB Preview-An appetizer for the June meeting. As usual, the press release will be published at 13:45 CET while the press conference begins at 14:30 CET.


On the data front, we will get the weekly jobless claims from the US and April flash consumer confidence from the Euro Area.




· Dollar loses bond yield support, euro looks to ECB for inspiration

The dollar was pinned near multi-week lows against most major currencies on Thursday as fading gains in U.S. Treasury yields reduced the greenback’s interest rate advantage.


The euro was in focus ahead of a European Central Bank (ECB) meeting later on Thursday, where any positive comments about the economic outlook or hints of tapering bond purchases are expected to send the common currency racing higher.


Sentiment toward the dollar has weakened as last month’s spike in Treasury yields reverses course, but some analysts say the outlook over the longer term remains positive due to a strong U.S. economy and an improved coronavirus vaccination programme.


The dollar stood at 107.99 yen, close to a seven-week low.

The euro was quoted at $1.2043, not far from its strongest since March 3.

The British pound bought $1.3939.

The onshore yuan rose to 6.4828 per dollar to reach its strongest level since March 12.


However, this trade has started to unwind this month as yields reversed course, and investors will now look to the U.S. Federal Reserve’s meeting next week for new trading cues.


The ECB is not expected to change policy when it meets later on Thursday, but analysts say this meeting will set the stage for June, when policymakers have to decide whether to slow bond buying.


Dutch central banker Klaas Knot has already said tapering is possible, and the euro could resume its rise against the dollar on any signs that a reduction in bond purchases is gaining more support within the ECB, analysts said.


· Jobless claims preview: Another 610,000 Americans likely filed new unemployment claims


New weekly jobless claims likely edged higher last week after plunging to the lowest level since the start of the pandemic.


· Treasury yields fall ahead of jobless claims data

U.S. Treasury yields fell on Thursday morning, ahead of the release of weekly jobless claims data.

The yield on the benchmark 10-year Treasury note dipped to 1.552% at 4 a.m. ET. The yield on the 30-year Treasury bond dipped to 2.244%. Yields move inversely to prices.


· U.S. adds 116 countries to its ‘Do Not Travel’ advisory list

The U.S. State Department has added at least 116 countries this week to its “Level Four: Do Not Travel” advisory list, putting the UK, Canada, France, Israel, Mexico, Germany and others on the list, citing a “very high level of COVID-19.”


On Monday, the State Department said it would boost the number of countries receiving its highest advisory rating to about 80% of countries worldwide.


Before Tuesday, the State Department listed 34 out of about 200 countries as "Do Not Travel." The State Department now lists 150 countries at Level Four. It declined to say when it would complete the updates.


· Syria gets 200,000 doses of AstraZeneca vaccine under COVAX scheme - U.N. officials

Syria's government has received its first delivery of COVID-19 vaccines through the global COVAX initiative, with almost 200,000 doses of the AstraZeneca AZN.L shot, U.N officials said on Thursday.


· India posts daily rise of over 300,000 COVID-19 cases, record death toll


· Japan Carmakers Cancel 2021 Tokyo Motor Show Due to Pandemic

This year’s Tokyo Motor Show will be canceled due to the ongoing pandemic, Japan Automobile Manufacturers Association Chairman Akio Toyoda said.


· Hong Kong-Singapore travel bubble announcement delayed as Singapore quarantines hundreds of migrant workers

Hong Kong and Singapore have delayed a planned Thursday announcement of the launch of a long-awaited travel bubble to next week, according to two people familiar with the matter.


· Singapore probing COVID-19 re-infections after cases in workers dormitory

Singapore’s manpower ministry said authorities were investigating the possibility of COVID-19 re-infections among residents in a migrant workers’ dormitory, after finding about a dozen positive cases in the facility.


· Ecuador announces curfew, curbs as COVID again overwhelms hospitals


· Nowhere as worrisome for COVID-19 as S. America, Brazil especially concerning -Pan American Health official


· China says Australia should avoid aggravating already strained bilateral ties

China's foreign ministry warned on Thursday that Australia should avoid making already strained bilateral ties worse, after Australia scrapped two accords between Victoria state and China under Beijing's flagship Belt and Road initiative.


· De-coupling from China would be the wrong way to go, Germany warns

The European Union needs to engage with China despite many differences instead of opting for a more isolationist approach, Germany said on Wednesday.


"In the EU, we have been describing China as a partner, competitor and systemic rival at the same time," German Foreign Minister Heiko Maas said ahead of a virtual meeting with his Chinese counterpart Wang Yi.


· France warns Russia of sanctions if critic Navalny dies

France's foreign minister told Russia on Thursday that the European Union would hold President Vladimir Putin and Russian authorities directly responsible if hunger-striking Kremlin critic Alexei Navalny died and it would impose new sanctions.


· A US official yesterday hinted that even though negotiations could begin a revival of the 2015 nuclear deal is still far away. Gaps remain wide with respect to what is need to get compliance back.


· Israel intensifying air war in Syria against Iranian encroachment


· Millions face hunger as Myanmar crisis worsens, United Nations says

Food insecurity is rising sharply in Myanmar in the wake of the military coup and deepening financial crisis with millions more people expected to go hungry in coming months, the United Nations said on Thursday.


Up to 3.4 million more people will struggle to afford food in the next three to six months with urban areas worst affected as job losses mount in manufacturing, construction and services and food prices rise, a World Food Program (WFP) analysis shows.


"More and more poor people have lost their jobs and are unable to afford food," country director Stephen Anderson said in a statement.


· Oil extend losses into 3rd day on U.S. stock build, pandemic fears

Oil prices extended their losses into a third day on Thursday as a surprise build-up in U.S. crude inventories and a resurgence of COVID-19 cases in India and Japan fuelled fears that a recovery in global economy and fuel demand may be stalled.


Brent crude futures fell 18 cents, or 0.3%, to $65.14 a barrel by 0721 GMT, following a drop of $1.25 on Wednesday. U.S. West Texas Intermediate (WTI) crude futures were down 17 cents, or 0.3%, at $61.18 a barrel, after losing $1.32 on Wednesday.


Both contracts dropped more than 2% on Wednesday, closing at their lowest since April 13. They are down about 3% so far this week.


U.S. crude oil stockpiles unexpectedly edged higher in the week ended on April 16, the Energy Information Administration said on Wednesday, with the inventories rising by 594,000 barrels, against analysts' expectations in a Reuters poll for a 3 million-barrel drop. 


Reference: CNBC, Reuters, FXStreet

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