U.S. economic output will hit a new high by the end of June, a return to the pre-pandemic peak far ahead of the dire predictions of last year, St. Louis Fed president James Bullard said. Real gross domestic product hit a high of $19.2 trillion at the end of 2019. For the first three months of 2021 it was $19 trillion on an annualized basis, putting the United States close to completing its recovery from the pandemic downturn, Bullard said, and "moving into the expansion phase of the business cycle." Jobs by contrast have lagged, with 8.2 million fewer people working than before the pandemic. Meantime, Fed’s Waller on Thursday became the latest Fed governor to try and dampen expectations for central bank action to curb rising prices that he sees as “temporary.”
ECB's Stournaras says Europe not facing same inflation worries as U.S.
Europe is not facing the kind of inflation concerns seen in the United States and the current mix of monetary and fiscal policy is
appropriate, European Central Bank Governing Council member Yannis Stournaras said on Thursday. "I think both fiscal and
monetary policy are the right mix," Stournaras told the Delphi Economic Forum in Athens. He said that despite signs that financial
markets were predicting inflation, in Europe models showed that "we have not yet to worry about inflation or not to worry as perhaps
in the United States."
Germany's 2021 election and why it matters to markets
It's rare for German elections to be exciting, market-moving events but the one on Sept. 26 may prove the exception if its outcome
completes the transformation of a nation long wedded to austerity into a big spender. The election will end Angela Merkel's 16-year
stint at the helm of Europe's biggest economy, and the Greens have a chance to become the leading party in national government
for the first time in their 40-year history. The implications could range from more environment-focused spending to greater euro zone
cohesion. German bond yields have risen since the Greens nominated their first candidate for chancellor because of increased
election uncertainty and a perception that increased fiscal spending could be on the way.
Dollar Up, but Inflation Set to Remain “Big Theme” Over Next Few Months
The 10-year government bond yield (interpolated) on the previous trading day was 1.79, +2.00 bps. The benchmark government
bond yield (LB31DA, 10.5 years) was 1.85, +4.50 bps. LB29DA could be between 1.83-1.87. Meantime, the latest closed US 10-year
bond yields was 1.66%, -3.00bps. USDTHB on the previous trading day closed around 31.37 Moving in a range from 31.30-31.37
this morning. USDTHB could be closed between 31.32-31.39 today. Meantime, The dollar was up on Friday morning in Asia, set to
post a weekly gain. Investors are now beginning to assess the risk that U.S. inflation will rise faster and prompt central bank interest
rate hikes sooner than expected.
Sources : Bloomberg, CNBC, Investing, CEIC
