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Forex Traiding

Markets are doubtful whether Biden’s incentive initiative will be fully adopted by Congress (there are high risks

DATE OF PUBLICATION: 2021-01-15 09:40:44 On Thursday, the world markets were very “cheered up” against the background of extremely disappointing data from the labor market in the United States and the new large-scale program of assistance to the American economy and citizens of the country announced by J. Biden. So what happened? On Thursday, there was another data on the number of applications for unemployment benefits, which were extremely disappointing. They rose 965,000 over the past week, a notable increase since August last year, with the number of applications for the previous review period being lowered to 784,000 and a forecast of 795,000. In the wake of this news, the stock market in America and Europe began turn down amid growing fears that labor market problems will continue to weigh on the country’s economy. And all this, together with the coronavirus pandemic factor, is causing widespread concern among investors, indicating that investors have begun to doubt the ability of the American economy and the world to recover quickly this year. to its citizens by $ 1.9 trillion, which is in itself an unprecedented event and, in theory, should have led to a sharp increase in demand in the stock markets, but this did not happen. On the one hand, this can be explained by the banal rule of thumb “buy on expectations and sell after the fact”, but, as it seems to us, the reason is still different. Investors, it seems, do not strongly believe that such an incredible amount of assistance, firstly, can be passed by Congress, and then it will be the strongest disappointment, and on the other, the markets are almost one hundred percent sure that the entire declared amount In the foreign exchange market, the attempt of the US dollar to grow amid a wave of negativity was restrained by the comment of Fed Chairman J. Powell, who made it clear that one should not expect a change in the level of interest rates in the foreseeable the future, but the rise in the yield curve of government bonds indicates that investors have doubts about the resilience of the regulator. In any case, the data on consumer inflation published earlier this week indicate that inflation is growing, and if this process continues, the Fed will have nothing to do but revise its view on the monetary exchange rate. Assessing the situation on the markets, we believe that a correction may continue, but only until the decision of the Congress on support measures. Here, an upward reversal with strong growth may occur, if the measures are approved, and a collapse may occur if not. As they say, time will tell. Forecast of the day: EURUSD is trading at the level of 1.2130, breaking which will lead to its fall to 1.2080. AUDUSD is consolidating in the range of 0.7660-0.7800. A decline below 0.7740 may lead to a fall in the price to the lower border of the 0.7660 range. Material provided by InstaForex – Source – InstaForex

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