USD Rises Following Biden’s New Infrastructure Plan

With the new infrastructure plan coming, the US dollar breaks through this year’s new high. Biden to expose $2 trillion, 8-year infrastructure plan

  Federal Reserve Vice Chairman Quarles said on Tuesday that a group of financial regulators would make recommendations in July to increase the resilience of money market funds and reduce the probability of receiving government aid in the future. The group will focus on money market funds and short-term funds—the relationship between markets. Besides, he also stated that investors should believe the Fed’s statement on the current inflation target, allowing inflation to be slightly higher than 2%.

  The IMF will release its global economic outlook report next Tuesday, which will raise its global GDP forecasts for this year and next. In January, it was expected to grow by 5.5% and 4.2%, respectively. The IMF warned that the outlook for the epidemic is uncertain. A small number of countries headed by China and the United States can exceed the GDP by the end of this year, while other countries’ recovery is “dangerously divided.” After the US fiscal stimulus, inflation may reach 2.5%, “but that is not a concern.”

  Some representatives of the Organization of the Petroleum Exporting Countries (OPEC) said that after Saudi Arabia expressed that the figure was too high, the OPEC+ technical expert group agreed to lower the oil demand forecast for 2021. They also stated that OPEC+ will still avoid a substantial increase in crude oil production when it meets on April 1.

  According to satellite news, the Saudi side has promised to continue to reduce production voluntarily. The Saudi side has contacted some OPEC countries, most of which hope to extend the (production reduction) agreement to May. However, the Kremlin stated that Russian President Putin currently has no plans to hold talks with Saudi Arabia on OPEC+. OPEC data shows that if the production cut is extended, the inventory in May will be reduced by 2.9 million barrels per day. OPEC expects that the oil reserve surplus will be exhausted before the end of the second quarter. The oil inventory surplus will fall to 3 million barrels at the end of the second quarter.

  The White House will probably announce a $ 2.25 trillion infrastructure investment plan on Wednesday; The Washington Post, citing two people familiar with the matter, reported that Biden would announce a $2.25 trillion infrastructure and employment support package Pittsburgh on Wednesday. The package includes approximately US$650 billion to rebuild roads, bridges, highways and ports, about US$400 billion to care for the elderly and the disabled, US$300 billion to housing infrastructure, and US$300 billion to revitalise the manufacturing Industry. In addition to the $2.25 trillion plan, the White House will also launch an approximately $400 billion clean energy loan program. Other investments include hundreds of billions of dollars for power grids, national high-speed broadband and clean drinking water. The White House will issue a second set of drafts within a few weeks, including the expansion of medical insurance and child tax deductions. The combined size of all bills may exceed 4 trillion U.S. dollars.

  Yumi Shinohara, deputy manager of the fleet management department of Zhengrong Steamship, the owner of the container ship “Nagachi”, said that the company had not received any claims or litigation regarding the blockage of the Suez Canal.

  Yields on 10-year U.S. Treasury bonds gave up most of their gains after hitting a 14-month high. The Dow fell more than a hundred points, the pan-European stock index approached its historical high set 13 months ago, and German stocks reached a new high. The U.S. dollar hit a new high in more than four months, and Bitcoin rose above 59,000 U.S. dollars in intraday trading, setting a new high in more than a week. Gold fell below US$1,700 and approached an 11-month low, silver hit a three-month low, London copper hit a new low for more than five weeks, and crude oil ended two consecutive rises and fell to more than one-week highs.

 

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