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Here is what you need to know on Monday, April 12:

Markets have kicked off the week with a modest risk-off tone, with the dollar and the yen gaining and stocks falling. The Fed’s Powell reiterated his commitment to support the economy amid rising inflation concerns. Virus concerns remain prevalent and Bitcoin is hovering near the highs.  

Jerome Powell, Chair of the Federal Reserve said that the economy is at an “inflection point” in which growth is substantially accelerating but that that could allow the disease to spread quickly. He reiterated that the Fed wants inflation to remain moderately above 2% for some time but not get out of control.  

Powell spoke after producer prices for March beat estimates, rising beyond the “base effects” related to the outbreak of the pandemic last year. Fed Vice Chair Richard Clarida said that if mid-year inflation persists through year-end, it would show that it is here to stay. Tuesday’s Consumer Price Index figures are highly anticipated.  

The dollar is rising across the board with EUR/USD pressured under 1.19 and GBP/USD below 1.37. Gold is also below the peak, changing hands under $1,740.  

More Dollar rally coming? Clarida’s clarity, powerful PPI, point to the Fed raising rates sooner

Virus: The US continues inoculating its population at a rapid clip, reaching some 35% of its population but COVID-19 cases continue rising in some states. In Europe, infections remain elevated. In the UK, non-essential shops, bars and gyms are reopening on Monday.  

Vaccines: A study in Israel has shown that the South African variant is more resistant to Pfizer’s immunization than other strains. China is recalibrating its vaccines after some lack of satisfactory efficacy.  

Middle East: A cyberattack on Iran’s nuclear site at Natanz is set to have set back the country’s efforts to enrich uranium for months. The explosion has been attributed to Israel and comes amid renewed talks between Iran and the West. Oil prices have shrugged off this development.  

Cryptocurrencies: Ripple’s XRPP has shot higher to $1.50, Ethereum is trading around the highs of $2,150 and Bitcoin is hovering around $60,000 after an active weekend.  

Bank to the Future: Interest rates return to market center stage

 

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