U.S. equities rejoice after Senate approves infrastructure investment bill - Market Overview

U.S. equities rejoice after Senate approves infrastructure investment bill - Market Overview

The North American Senate passed the $550 billion infrastructure investment bill, boosting the U.S. economy.

However, the bill has yet to be approved by the House of Representatives, but no setback is expected. Although this investment proved a great stimulus for the economy, the markets already seem to have discounted it, as they had expected an investment proposal much higher than the approved one.

In any case, the USA30 index experienced a slight upward momentum after the news came out, reaching a new maximum at 35.174.

CPI report up next

Today, the market's attention will be on the U.S. CPI figures for July. Although the Federal Reserve focuses on employment as part of its monetary policy, we should also consider price stability equally important, precisely what CPI can reveal (or not).

A further rise in prices could put pressure on the Fed, forcing it to start reducing its stimulus policy and increase market expectations for an earlier-than-expected tapering announcement. The average market forecasts expect a decline in core inflation for July to 4.3%, in annual terms, from 4.5% in June, but some analysts predict further increases to 4.7%.

For the moment, after the latest employment figure and the approval of the bill on investment in infrastructure yesterday, long-term interest rates have experienced a noteworthy increase. The 10-year U.S. government bond reached ​​1.37% and could continue climbing if today's inflation figures do not carry on their upward trend.

Elsewhere in the Forex market

The U.S. Dollar strengthens against all its counterparts, driven by higher long-term interest rates and higher expectations of the start of tapering by the Fed.

EUR/USD fell sharply due to a stronger dollar, but also due to the weakness of the European economy after Germany’s ZEW economic sentiment came out, showing an abrupt fall to 40.4 from 63.3 in the previous month.

Technically, the pair is about to break down the 1.1704 area, below which a weekly double top would be activated with a theoretical target of 1.1150.

Sources: Bloomberg, reuters.com.

Le informazioni contenute nel presente documento sono redatte da Miguel A. Rodriguez e non costituiscono né devono essere interpretate come suggerimenti di investimento. Le informazioni di cui al presente documento costituiscono comunicazioni di marketing generali a scopo informativo e, in quanto tali, non sono state preparate nel rispetto dei requisiti di legge che promuovono le ricerche di investimento indipendenti. Inoltre, non sono soggette ad alcuna limitazione sulle transazioni condotte in anticipo rispetto alla divulgazione delle ricerche di investimento in questione.

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Pertanto, Key Way Investments Ltd non accetta alcuna responsabilità per eventuali perdite di trader a causa dell'uso e del contenuto delle informazioni presentate nel presente documento. Le performance passate non sono un indicatore affidabile dei risultati futuri.