Today there isn’t much on the economic calendar to affect the financial markets. Earlier in the day the Bank of Japan held its monthly policy meeting, where it left the interest rate unchanged at -0.1%. However, the BoJ did publish improved forecasts for economic growth, expecting the GDP to rise by 4% this year versus an earlier estimate of 3.9%.
Italy, one of the countries that were affected by the coronavirus the most in 2020, published its consumer and business confidence reports for April. Both readings surpassed the forecasts.
Later today the United States will publish the February house price index and the consumer confidence report for April. The latter is expected to have a greater impact on the market.
Moreover, the Federal Reserve will kick off its monthly monetary policy meeting today. Investors don’t expect any changes to come at this two-day meeting but it can still affect the dollar and its pairs.
As for the coronavirus pandemic, the world is slowly but surely approaching the milestone of 150 million infections; the current number is sitting at just over 148.5 million. At the current rate of infections, the 150 million milestone can be reached by Friday.
Still, the global infection rate this week is some 200,000 lower than it was last week, which is encouraging. The drop is likely the result of falling infection rates in Brazil, Turkey, the United States, and Europe as a whole.
The situation remains far more serious in India. Nevertheless, yesterday India declared some 319,000 new Covid-19 cases, its lowest number in a week. It is too early to say if this means the peak of the outbreak has been reached, but it is certainly a sign in that direction.
Of the G7 economies, Japan is now posing a concern as Covid-19 infections seem to be on the rise there. States of emergency have been announced in four prefectures. The new lockdowns and other restrictions are going to pressure the Japanese economy.
In terms of the stock markets, we expect all major US indices to trade flat today in anticipation of the results from the Fed meeting and the ongoing earnings season. AMD, Visa, Starbucks, and General Electric are among the biggest names reporting today.
Meanwhile, Tesla made it to most news headlines due to its latest earnings report. Though the company had a bigger profit than anticipated, most of it came from emissions credits and cashing in some of its Bitcoin investment, not from actual car sales. Investors are somewhat doubtful about the company’s business model as it stands, despite the profits, which is why Tesla shares are down today.
