Dollar holds onto gains, vaccine truce Suez blockage, US jobless claims eyed

Markets are attempting to stabilize after Wednesday’s fall, while the dollar is taking a breather from gains. Optimism about an EU-UK solution to the vaccine row is countered by a blockage to global trade in the Suez Canal. Investors await news on US infrastructure spending plans, while jobless claims and final GDP are eyed.

Dollar breather: The greenback has paused its gains, with EUR/USD holding above 1.18 and GBP/USD consolidating below 1.37. Jerome Powell, Chairman of the Federal Reserve, reiterated his position that inflation will likely be temporary and that the recovery has a long way to run. Ten-year Treasury yields have found their feet above 1.60%.

Tax hikes: Joe Manchin, the most centrist Democratic Senator, expressed his support for infrastructure spending and tax hikes. His critical backing may open the door to a bill that may boost the economy but weigh on markets and keep returns on debt depressed. President Joe Biden will present his plans on March 31.

US jobless claims are set to show a drop in the week ending March 19 and the final US Gross Domestic Product for the fourth quarter is predicted to confirm an annualized growth rate of 4.1%.

Wednesday’s release of Durable Goods Orders statistics for February disappointed with a substantial drop, yet the “deep freeze” storm may have pushed investment lower.

Vaccines: The EU and the UK released a joint statement saying they are working on a “win-win” solution to the row over exports of immunizations, providing some calm. The bloc’s leaders meet virtually on Thursday with the sluggish vaccination campaign topping the agenda.

Italian authorities unveiled a stockpile of some 29 million AstraZeneca doses, adding to the controversy surrounding the firm. The embattled company updated its efficacy figures for its Phase 3 US trial to 76%, down from 79% originally reported.

Stuck in Suez: A 400-meter long mega-ship remains stuck in the Suez Canal, blocking trade across the critical waterway and blocking hundreds of ships. A special crew has been called to help release the ship. Every day that passes adds to supply-chain issues that have gripped the world since the outbreak of COVID-19. Some estimates suggest it may take six days to free up the Canal, but oil prices are stable around $60 for WTI.

The US Securities and Exchanges Commission has opened an inquiry into Special Purpose Acquisition Companies (SPACs) which have been one of the latest frenzies on Wall Street.

Bitcoin is trading around $53,000, stabilizing after falling earlier in the week. Other cryptocurrencies are similarly bouncing from their lows.

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