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Here is what you need to know on Wednesday, May 20:

Markets have stabilized and the risk-on mood has resumed, pushing the dollar and yen lower after the breather, a result of cooling down regarding vaccine and Federal stimulus hopes. Inflation figures, central bank talk, and speculation about the economic recovery are eyed.

Vaccine doubts: After the initial enthusiasm, scientists wanted to see more details about Moderna’s initial success in developing immunization for COVID-19, and without evidence, investors follow experts with skepticism. 

Fed fatigue?: Jerome Powell, Chairman of the Federal Reserve, and Steven Mnuchin, the Treasury, gave a lengthy online testimony before a Senate committee, yet did not create any headlines. Powell continued nudging elected officials to provide more stimulus and White House Economic Adviser Kevin Hassett said it is under consideration.

The Federal Reserve’s meeting minutes from the recent decision are due out late in the day. 

See FOMC Minutes Preview: Watching for hints of negative rates

Sino-American rhetoric has been elevated, yet out not at center stage. Hu Xijin, the editor of Global Times, continued lashing against President Donald Trump. The administration continues working on plans for re-shoring supply chains. 

UK: Chancellor of the Exchequer Rishi Sunak painted a gloomy picture of the British recession “the likes of which we have not seen” in a parliamentary session. GBP/USD seems unfazed, His comments came after the Claimant Count Change leaped above 800,000, far worse than expected. Inflation figures are set to show a substantial slide in April (preview).

Andrew Bailey, Governor of the Bank of England, will face MPs later in the day. David Frost, the UK’s Chief Negotiator, accused the EU of offering a “low-quality deal.” His counterpart Michel Barnier also criticized Britain. 

Eurozone: EUR/USD has been consolidating its gains, driven in part by the Franco-German agreement to boost the EU budget by €500 billion using bond issuance by the bloc. Phillip Lane, Chief Economist at the European Central Bank, said that his institution may adjust bond-buying. 

The Canadain dollar is on the rise amid the better market mood and oil prices remain on the rise. Private inventory data has shown a surprising draw, supporting crude prices. Inflation figures for April are due out in Canada.

AUD/USD is holding up around 0.6550, just below the fresh highs, shrugging off preliminary retail sales figures for April that showed a plunge of 17.9%. 

NZD/USD has resumed its upswing, in line with the market mood, and despite the Reserve Bank of New Zealand’s openness to set negative rates, albeit under specific conditions. 

Emerging markets: Brazil is the world’s new COVID-19 hotspot, with the nation’s curve continuing to surge. A super-cyclon is approaching eastern India and Bangladesh. India’s coronavirus cases have passed the 100,000 mark. 

Gold prices have stabilized around $1,750, after hitting new 7.5 highs and returning back to the range. The precious metal’s correlation with stock markets has been mixed.

Cryptocurrencies are marginally lower, with Bitcoin trading around $9,700. 

More: Political economy in the age of Trump – A conversation between Barbara Rockefeller and Joseph Trevisani