International Financial Information
[Federal Reserve Hack: The US economy is in a good state, and the economic growth rate is expected to be 2% this year]
The Fed should keep interest rates unchanged for a period of time. The Fed should observe economic development and data performance before taking action; it is expected to achieve the 2% inflation target. The unemployment rate is expected to remain below 4% in the next few years.
[Federal Reserve Daley: In the current environment, the inflation rate is slightly higher than the target level, "much better than" and slightly lower than the target level]
Fiscal policy should play a greater role in mitigating shocks, lower inflation rates, lower Interest rates mean less room for monetary policy to cope with the next downturn; Fed officials have the tools they need to raise inflation.
[EU strengthens negotiating requirements before Brexit trade talks begin]
According to foreign media reports, before the trade negotiations with the United Kingdom, EU governments have strengthened their negotiating requirements, a move that may increase tension with the British government. The EU-27 seeks to impose more stringent conditions on issues such as unfair competition, fisheries and human rights than before. The most controversial is that governments want to force Britain to continue to comply with EU regulations in areas such as state aid, even if the EU changes these regulations in the future. They will also seek to make the entire agreement conditional on Britain's commitment to respect the European Convention on Human Rights. The report said that before the 27 EU countries are scheduled to sign in Brussels on February 25, the EU's authorization to negotiate may be revised again. Negotiations with the UK will begin next week and an agreement needs to be reached before the end of the current transition period on December 31.
[Trump Announces Fiscal Year 2021 Budget Plan Cuts Social Welfare Items and Increases Defense Expenditure]
US President Trump on Monday announced the fiscal year 2021 budget plan, which proposes to significantly reduce social welfare items, but increase defense and statutory welfare spending, which It will raise total federal debt to more than $ 30 trillion by 2030. The $ 4.8 trillion budget spending plan announced on the White House website on Monday afternoon will lead to further rise in federal debt, partly due to tax cuts and increased defense spending.
Summary of Institutional Perspectives
TD Securities: Proposed Short EUR / JPY to Hedge Global Economic Growth Risks
TD Securities FX strategist Mazen Issa suggested in a report to clients on Monday that the EUR / JPY be shorted to take advantage of the downside risks to the euro caused by the pressure of economic growth under the influence of public health events. Unique position ", the market may be too" risky ", TD Securities recommends a" defensive tactical stance "on the euro;
Issa wrote that the consensus on a modest global economic recovery is now postponed and that the market is likely to "underestimate the extent of the supply chain disruption." Given our concerns about short-term risk appetite, we have chosen to increase the yen's long exposure. It is recommended to short EUR / JPY with an entry point of 120.20, a target price of 118.00, and a stop loss point at 121.60, reflecting "our tactical bearishness on the euro".
AdamCole, strategist at Royal Bank of Canada: bearish GBP / USD GBP / USD target at 1.2650
Investors should be prepared for a weakening of the pound against the dollar, as expectations of a rate cut by the United States have declined and the trade situation between the United Kingdom and the European Union has become increasingly tense. There are trade tensions between the United States and the European Union. Fed Chairman Powell should give an optimistic assessment of the US economy in semi-annual congressional testimony, which means that the market ’s expectations that the Fed will cut interest rates by 40 basis points this year seem to be excessive, and reassessment of expectations will continue to support the US dollar. At the same time, the risk that the UK and EU trade talks will not reach any agreement may put pressure on the pound. A short GBP / USD position should be established at 1.2882 with a target of 1.2650.