Markets cheer tame inflation, shrug off vaccine setbacks as cryptos soar, Powell awaited

Markets remain upbeat amid relatively tame inflation and despite a pause of J&J’s vaccines. The ECB’s Lagarde, the Fed’s Powell, and other central bankers are eyed. Cryptocurrencies are surging to new highs.

Several US stock indexes have hit new record highs and they are pulling Asian and European markets higher as well. US inflation advanced in March but fell short of what some had feared, with the Core Consumer Price Index hitting 1.6% yearly, allowing for an upswing.

The US dollar is depressed amid this risk-on sentiment and after a 30-year Treasury auction received high demand from investors. The benchmark ten-year yields have tumbled to around 1.60%.

EUR/USD is changing hands above 1.1950 despite a setback in Europe’s vaccination campaign. Johnson & Johnson suspended deliveries of its single-shot COVID-19 inoculations to the old continent following concerns about blood clots that arose in the US.

The FDA paused immunizations after six were linked to J&J’s jabs. Without the pharmaceutical’s vaccines, the EU is set to immunize 70% of the population only in December instead of the summer, yet the delay may be temporary. European Central Bank President Christine Lagarde is slated to speak later in the day.

GBP/USD is edging up toward 1.38 and USD/JPY is trading around 109. NZD/USD is around 0.71, benefitting from the greenback’s weakness and dismissing the Reserve Bank of New Zealand’s rate decision, which left rates unchanged.

Jerome Powell, Chair of the Federal Reserve, and three of his colleagues will speak later in the day, in parallel to the publication of the bank’s Beige Book, which includes anecdotal evidence about economic activity across the nation. The Fed’s message has been that higher inflation in the spring is transitory and that it is set to keep policy accommodative until the employment situation substantially improves.

Cryptocurrencies have been on a roll, with Bitcoin nearing $65,000. Ripple’s XRP is nearing the $2 level and Ethereum is also surging, changing hands around $2,400.

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