Crude oil quotations tried this morning to continue the upward trend that started two weeks ago. The US dollar remains stable.
G7 finance ministers reached a historic agreement on Saturday to reform the global tax system, opting for a minimum corporate tax rate of at least 15 percent.
The decision, long announced, is aimed at getting tech giants to pay their taxes fairly and could pave the way for a broader agreement among G20 countries next month. Investors are interested in whether the tax will translate materially into corporate earnings and thus into share prices, which are near historic highs.
Important data from the USA and Europe
The market is waiting for the report from the USA on consumer prices (CPI inflation) for May. It is likely to show an increase in inflation to 4.6 per cent, will be the highest since September 2008 and well above the Federal Reserve's target, which is around 2 per cent. Nevertheless, this may already be the peak of inflation in the US due to the base effect, as in May last year prices continued to fall relative to April. Hence, such a large change in May 2021 relative to May 2020.
On the other side of the Atlantic, investors are awaiting the publication of monthly UK GDP data. They are likely to show the unprecedented expansion of the British economy in April. Contributing to this, among others, was the increase in industrial and construction production. Data on foreign trade balance and house prices according to Halifax also seem interesting.
The decision and conference of the European Central Bank may be important. Markets expect no change in interest rates despite the recent surge in prices. Inflation in May reached its highest level since October 2018, and ECB policymakers have already said that cost pressures are expected to be temporary.
Dollar unfazed by a vision of big spending
In the foreign exchange market, the dollar index remained stable on Monday morning. This was unchanged by US Treasury Secretary Janet Yellen's statements regarding the need for President Joe Biden to push ahead with his $4 trillion spending plans, even if it causes inflation to persist into next year and higher interest rates.
The key Federal Reserve meeting for U.S. interest rates and macroeconomic projections is June 15-16.
Daniel Kostecki, Chief Analyst Conotoxia Ltd.
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