Weekly Market Update (03 May 2021) – Fed not impressed by recent strong U.S. economic data
ByLCMS Traders FX Analysis Team
MAY 3, 2021
(1) During its monetary policy meeting last Thursday, the Federal Reserve held interest rate unchanged at the targeted range of 0-0.25% while maintaining monthly bond buying at $120 billion. Despite the recent progress made in economic recovery, Fed Chairman Powell thinks that a full recovery is still a long way to go. Furthermore, Powell said that the transitory rise in inflation this year will not warrant an interest rate hike.
(2) The Bank of Japan (BoJ) held its monetary policy at status quo during its monetary policy meeting last Tuesday. Despite the recent spike in the number of COVID-19 cases, the central bank revised its projected GDP upwards for 2021 from 3.9% to 4.0%. The BoJ also highlighted that the outlook provided is highly unclear and is subjected to change depending on the consequences of COVID-19.
(3) The OPEC+ concluded their monthly meeting last week that from May through July, the organisation will carry out phased easing of oil production cut. The easing will see an increase of oil production by 2.1 million barrels-per-day. This decision comes as global demand for oil has increase and prices have recovered to pre-pandemic levels.
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