Today the economic calendar is quite busy with important publications that will affect the financial markets.
China opened up the day with a balance of trade that was massively disappointing, coming in more than four times lower than expected in March, and nearly ten times smaller than the previous reading.
Then, the United Kingdom delivered a batch of mixed reports. The most important among these were the 3-month average GDP through February and the YoY GDP for the same month, which were both better than the forecasts, though still in negative territory.
Industrial and manufacturing production also outdid the forecasts. However, monthly GDP data, reports on construction, and the goods trade balance were all disappointing.
The ZEW economic sentiment index for the eurozone for April is set at 66.3, which is lower than the previous number, largely because of the extended lockdowns in the EU. The same report for Germany failed to meet the forecast of 79 and came in at 70.7 instead.
Later in the day we expect the inflation and core inflation rate reports for March from the United States, followed by speeches by several members of the Federal Reserve. These would likely have big implications for the USD, all of the major pairs it is part of, and the many commodities quoted in US dollars.
So far today the dollar has been slightly stronger as investors expect that the inflation rate reports will not disappoint, but that remains to be seen.
Meanwhile, the vaccination campaign in the United States might be slowing down in light of safety issues with the Johnson & Johnson coronavirus vaccine. After six cases of brain blood clots within two weeks of getting that particular vaccine, the CDC and FDA recommended that its usage be halted, while a thorough investigation into the drug and its possible side effects is carried out.
All major US stock indices will be in red (or flat at best) today due to the news about Johnson & Johnson. Recall that the stock market rally is driven by optimism that the pandemic will be defeated. Stopping the use of one of three approved vaccines in the United States will certainly slow the pace of the vaccination campaign, which is pressuring the markets.
Covid-19 continues to be a threat to many regions across the world. The biggest daily increases in the number of infected people yesterday came from India (160,694), the US (56,522, which is still lower than what the country saw in previous months), and Turkey (54,562).
