Fed Chair says it can take months to start balance sheet rundown, giving markets hope of a more dovish tilt to US monetary policy, boosting stocks and knocking the US Dollar.
- In his renomination hearing at Congress yesterday, Fed Chair Jerome Powell stated it can take the FOMC several months to make a decision on balance sheet rundown. This is a dovish tilt to the perception of the Fed’s monetary policy, and markets reacted by selling the US Dollar, and buying stocks, commodities, and cryptocurrencies. Sentiment is now more “risk-on”, but faces the release of key US inflation data later today which could change that.
- Almost all global stock markets rose quite strongly yesterday, including the major Chinese and Japanese market indices.
- Bitcoin seems to have found support at $40k and Ethereum at $3k. These are bullish signs for these two cryptocurrencies in particular and the crypto market in general.
- In the Forex market, the Canadian and Australian Dollars are strong while the Swiss Franc, US Dollar, and Japanese Yen are weak. The greenback’s weakness continues to look solid but will need to be supported by today’s US CPI release not coming in higher than had been expected, although this could arguably also boost commodity currencies such as the Canadian and Australian Dollars.
- Daily new coronavirus cases soared to a new global record yesterday, with more than 2.8 million new cases recorded. Almost one quarter of these confirmed cases are in the USA. The World Health Organization believes 50% of Europeans will become infected over the coming weeks.
- Data suggests that the globally rampant omicron coronavirus variant, while considerably more infectious, has notably milder effects than previous coronavirus strains, with an estimated 70% reduction in the probability of hospitalization. This is potentially very good news for both health and economy. Pfizer have announced they plan to have an omicron-specific vaccine ready in March.
- It is estimated that 59.2% of the world’s population has received at least one dose of a coronavirus vaccination.
- Total confirmed new coronavirus cases worldwide stand at over 314.2 million with an average case fatality rate of 1.76%.
- The rate of new coronavirus infections appears to now be increasing most quickly in Albania, Algeria, Andorra, Argentina, Australia, Austria, Bahamas, Bahrain, Barbados, Belize, Bhutan, Bolivia, Bosnia, Brazil, Bulgaria, Canada, Chile, Colombia, Croatia, Cuba, Cyprus, Denmark, Dominican Republic, Estonia, Finland, France, Georgia, Germany, Guatemala, India, Israel, Italy, Japan, Kuwait, Latvia, Lebanon, Lithuania, Luxembourg, Mali, Mexico, Monaco, Montenegro, Morocco, Netherlands, North Macedonia, Norway, Panama, Peru, Philippines, Portugal, Qatar, Romania, Saudi Arabia, Senegal, Serbia, Slovenia, Sweden, Switzerland, Tunisia, Turkey, the UAE, Uruguay, and the USA.