Agriculture
Elsewhere, corn futures topped $7 per bushel for the first time since 2013 amid supply concerns driven by a lack of rainfall in Brazil.
Currencies
The pace of vaccinations has picked up even in the Euro area, while also seasonal variation is aiding in pushing new Covid-19 infections lower. Despite the recent diverging paths, we see much more upside potential for US yields than Euro-area ones. Intra-Euro-area bond spreads have widened moderately at the same time. On the economic data front, we’ll get services activity readings for the euro-area. We target 1.15-1.16 in EURUSD.
Metals
In 2019-20, India’s refined copper import was 152,000 tonnes while export was 39,000 tonnes, making the country a net importer of well over one lakh tonnes. Developments in China’s power grid and EV production will be keenly tracked.From being a net exporter, India became a net importer of copper three years ago. Is the world copper market in deficit or surplus? Key risks: Steel is a cyclical industry and we have assumed that domestic steel prices will trade close to MIP.
Copper also rose back above $10,000 a ton. With MIP in place, we don’t expect domestic steel prices falling below ₹36,000-37,000/t.
Copper also rose back above $10,000 a ton. With MIP in place, we don’t expect domestic steel prices falling below ₹36,000-37,000/t.
Oil
Oil prices have been boosted as reopening efforts globally underpin hopes for demand to return to normal levels and by U.S. crude stockpiles falling.
United States
This time last month, Eurodollar futures contracts reflected expectations for at least one Fed hike by the end of next year, and possibly four by the end of 2023. less The improving macro environment and stronger inflation signals are likely to convince at least the Fed to change course. The Fed outlook is also likely to be repriced later this year when the central bank starts to change its rhetoric. The US is now about to reap the growth rewards of the experimental policy mix of massive money printing and wide scaled fiscal stimulus.
Chairman Jerome Powell has repeatedly stressed that the Fed intends to sit on its hands and allow inflation to stray marginally above 2% without acting to cool the economy. How the Fed reacts to the economic recovery and the administration’s bulging spending plans isn’t all that matters, but it sometimes seems like investors believe that it is. The US stocks, which slumped in early session on Tuesday due to Joe Biden’s super rich tax fears, ended the day in the positive territory.
Our view is that tapering will be debated in June, launched in September and followed up by a subsequent hike from the Fed already around summer 2022. Highlights: The macro environment continues to improve, and inflation pressures are mounting, especially in the US. Inflation signals are flashing red even in the US services sector.
Chairman Jerome Powell has repeatedly stressed that the Fed intends to sit on its hands and allow inflation to stray marginally above 2% without acting to cool the economy. How the Fed reacts to the economic recovery and the administration’s bulging spending plans isn’t all that matters, but it sometimes seems like investors believe that it is. The US stocks, which slumped in early session on Tuesday due to Joe Biden’s super rich tax fears, ended the day in the positive territory.
Our view is that tapering will be debated in June, launched in September and followed up by a subsequent hike from the Fed already around summer 2022. Highlights: The macro environment continues to improve, and inflation pressures are mounting, especially in the US. Inflation signals are flashing red even in the US services sector.
Europe
The ECB is then likely to start tapering the PEPP in the autumn, as the recovery strengthens, and end net purchases under the programme in March 2022. PayPal New RulesThe European Union is set to announce new rules on Wednesday that would prevent foreign state-funded companies from undercutting their rivals in the EU. To manufacture cutting-edge chips, the EU will likely have to partner with U.S. or Taiwanese companies like Intel or TSMC.
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