The last business day of the week is bringing some more torment to the financial markets as the United States and China are holding their first meeting since the change in administration. Biden has been critical of the way China is treating its Muslim minority, among other things, and the two delegations did not begin the talks on an amiable note. The world’s two largest economies are currently pointing fingers at one another and neither seems ready to give in.
The end of the week also brought a conclusion to a series of central banks meetings that started with the ECB last week and included the Federal Reserve, Bank of England, Bank of Japan, and the central banks of Brazil, Russia, and Turkey, among others.
The first three regulators did not change their policies, while the Bank of Japan cancelled its planned bond purchases in an admission that its current policies are not working, i.e. they are not efficient enough at preventing deflation.
The emerging market central banks (Brazil, Turkey, and Russia) all opted for more hawkishness, considering the appreciation of the US dollar and the inflation within their own territories.
Meanwhile, US stock indices are correcting upward today after yesterday’s losses. The Dow Jones remains the best-positioned index in the current market conditions and will finish the week better off than the rest.
In Europe, the coronavirus pandemic is the dominant topic. Infections are on the rise again in what is commonly known as the third Covid-19 wave. Major economies like France and Germany are heading back into stricter lockdowns, as the vaccination rate within the EU remains alarmingly low.
Still, last night the European Medicines Agency announced that its investigation into AstraZeneca’s vaccine showed no link to blood clotting issues. With that product deemed safe to use again, EU countries are set to resume vaccinations starting today, yet they remain significantly behind the target goals.
