Biden advisors readying multi-part $3 trillion infrastructure package

Looks like it will be a two-part package

Looks like it will be a two-part package
Biden’s advisers are expected to present a proposal to the president this week that recommends carving his economic agenda into separate legislative pieces, according to the New York Times.
The first part that’s detailed includes nearly $1 trillion in spending on roads, bridges, rail lines, ports, electric vehicle charging stations and improvements to the electric grid and other parts of the power sector along with 5G technology and some green initiatives.
Biden’s team likely sees this part of the package as something amenable to Republicans or at least worth discussion, but how Republicans respond may come down to how it’s paid for.

US Press Sec: China meeting was substantive despite focus on theatrics

White House Psaki speaking to reporters

  • CHina meeting was substantive despite focus on theatrics
  • continues to have concerns about human rights in China related to Xinjiang
  • cannot rule out further actions on China
  • evaluating appropriate next steps on China
  • US is certain China taking note of its renewed cooperation with allies
  • US remains committed to working through covax on vaccine distribution to other countries
  • US does not have new vaccine goals set, hope to have soon

Fed’s Powell: We don’t want to destabilize with a central bank currency

Comments from Powell at a BIS innovation Powell

Comments from Powell at a BIS innovation Powell
  • We have a two-tier system, we don’t want to compete with banks
  • We want to be able to co-exist with the current system and cash
  • We’re doing a broad system of experimentation
  • To move forward on digital currency, we would need broad buy in from Congress, the administration and the public
Powell made it very clear that nothing will be done to hurt the banking industry.

US futures ramp higher as the early jitters abate

S&P 500 futures up 0.3%


The collapse in the Turkish lira has been met with a bit of a pause in European morning trade so far, with USD/TRY ranging between 7.80 and 8.00 for the most part after having opened with a 15% gap higher at 8.35 earlier in the day.

The relative “calm” is helping to see risk assets recover on the session now ahead of North American trading with the dollar also falling to the lows of the day.


Bundesbank says German economy likely to contract sharply in Q1 2021

Bundesbank comments in its monthly report

  • The measures to contain the virus are on average stricter in Q1 than Q4 last year
  • Economic output will probably decline sharply in Q1
  • Activity in services in particular is likely to decline again
  • Higher VAT rates since the start of the year also likely to have played a role
  • Industry sector benefited from dynamic foreign demand, should have supported economic activity in Q1
Nothing that we don’t already know but keep an eye out on the daily virus numbers out of Germany for a sense of how things may progress next and at what pace. In particular, be mindful of the 7-day incidence rate – which has climbed to 107.3 today.

Barclays expects a delay to Eurozone economic recovery

Barclays revises lower its 2022 Eurozone GDP growth forecast

Amid recent developments, the firm is less confident about the strength of the recovery in the euro area as they revise lower their 2022 growth projections for the region from 5.3% previously to 4.3% currently.
The 2021 GDP growth forecast remains unchanged at 3.9%. Barclays notes that:

“We expect a delayed and more modest economic recovery, due to recent negative epidemiological developments and their potential scarring effect. Our revised annual read GDP growth forecasts are 3.9% in 2021 (unchanged) and 4.3% in 2022 (-1.0%).

Our forecasts imply a growing divergence between the euro area and the US, and among euro area member states, with 2022 real per-capita GDP still 7% below pre-global financial crisis levels in Italy, but 20% and 16% above in the US and Germany.

Euro area governments are currently tightening mobility restrictions and, in our view, are likely to scale them back only late in Q2 and gradually, which will weaken domestic demand and, consequently, imports.”

BOJ purchases ¥50.1 billion worth of ETFs today

BOJ kicks off its new ETF policy with a ¥50.1 billion purchase today

That’s the third time this month and the fourth time (all same amounts) this year.
The latest purchase today comes amid a 2% drop in the Nikkei and a 1% drop in the Topix. The latter is the focus of the latest shift in BOJ policy but if anything, it just rather shifts the support away from less growth-heavy stocks to more value-heavy stocks.


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