Yazar: Geoffrey Smith
Investing.com – Jerome Powell’s keynote speech supported Treasury yields and shares and blocked the dollar. While the US and China make their first phone calls, OPEC and IEA (international energy agency) will publish their monthly reports on the world oil market. Here’s what you need to know in financial markets on Thursday, February 11th.
1. Powell’s speech
Treasury bond prices strengthened and the dollar remained weak after Fed Chairman Jerome Powell reinforced that monetary support would not be withdrawn early as the US economy recovered from the epidemic.
In a keynote speech Wednesday, Powell stressed that the policy must remain “patiently expansionary”, pointing out that the damage done by Covid-19 to the labor market continues.
“Unemployment rates published during Covid-19 highlighted the disruption in the labor market,” Powell said, adding that both households and small businesses will likely continue to be “supported”.
The context of Powell’s comments will be visible when the weekly unemployment claims are posted.
The dollar remained generally calm against its major rivals, down 2 bps to 1.14%.
2. Biden and Xi speech
President Joe Biden made his first phone call with his Chinese counterpart, Xi Jinping, on the eve of the Lunar New Year holiday to mark the start of the Year of the Ox.
According to the White House, Biden stressed that China should abandon its “exploitative and unjust” economic practices, such as slave use, especially in the Muslim-dominated Xinjiang region. He also reiterated that the United States supports Taiwan, drawing attention to human rights issues in Hong Kong.
According to the South China Morning Post, Xi responded by stating that Taiwan, Hong Kong, and Xinjiang are China’s “domestic affairs”.
Economic relations between China and the US will continue to be the main driver for world markets. The world wonders if beyond a less aggressive and hyperbolic tone, Biden will signal any significant change in Trump’s policy.
3. Stock markets will open high on Powell’s statements
US stocks will open higher on Thursday, backed by Fed Governor Powell, who reaffirmed that they will continue to keep monetary policy expansionary. Doubts that the Fed will release incentives ahead of schedule were cleared again on Wednesday. Consumer inflation in January remained below expectations.
The Nasdaq climbed by 88 points, 0.4% and 0.5%, respectively.
Among the stocks that may be in the center of attention Pepsico (NASDAQ :), Kraft Heinz (NASDAQ :), Tyson Foods (NYSE:) ve Walt Disney (NYSE 🙂 var.
4.Uber (NYSE 🙂 in decline after disappointing
Uber saw a 5% drop in its pre-market shares after sharing disappointing numbers for the last quarter of the year.
While his income from the food delivery business tripled from a year ago, his overall revenue fell 20% from a year ago to $ 3.7 billion – $ 3.58 billion was expected. The company’s net loss was also slightly above expectations, at 58 cents.
Uber CEO Dara Khosrowshahi said the company will make a profit this year, but did not give details about when exactly it will pass. He stated that the recovery in airport business, which accounts for 15% of gross bookings before the pandemic, will take some time.
5. IEA & OPEC reports
Iran said it was making uranium metal that could also form the core of nuclear warheads, the US administration said on Wednesday. This development seems to make it difficult to return to the UN-backed agreement between Iran and the West and consequently the easing of sanctions that disrupt oil exports.
After a big rally, it fell 0.8% to $ 58.22 with profit realization, while it fell 0.9% to $ 60.93.
While the IEA’s monthly report does not have much effect, the OPEC report will be shared at 08:00 local time.