Investors are still optimistic. They could be reassured by the message of representatives of the US Federal Reserve that inflation will be only temporary and will not lead to the tightening of monetary policy in the USA.
European stock markets are near record highs on Tuesday, with Germany's DAX 30 rising nearly 1 percent to a record high of 15,580 points. Investors still seem to be focused on the prospect of a solid recovery in 2021. At the same time, they breathed a sigh of relief after recent worries about rising inflation. Bank of England Governor Andrew Bailey said Monday that he doesn't see inflation as a major concern in the medium to long term, while the U.S. Federal Reserve has pledged to maintain ultra-loose monetary policy despite the recent rise in consumer prices.
A speech by the European Central Bank's chief economist, Philip Lane, will be scrutinized for clues on what the bank may do at its June meeting. Here comes the topic of the strong euro, which is once again approaching its early 2021 highs. At the time, this was caused by the ECB's displeasure.
In the United States, after a successful Monday session where the Dow Jones Industrial Average rose 0.54 percent, the S&P 500 gained 0.99 percent and the Nasdaq Composite 1.41 percent, investors are now awaiting the release of US consumer prices and the second estimate of Q1 GDP later in the week.
In the cryptocurrency market, the price of bitcoin returned to the $38,000 region after falling to $31,000 over the weekend. Optimism was again brought to the market by Elon Musk, who along with the CEO of MicroStrategy (the company listed on the New York Stock Exchange with the largest amount of BTC in its portfolio) signaled support for the apparent efforts of BTC miners to make their operations more environmentally friendly. The industry meeting is scheduled to take place on Sunday, which could translate into another heightened volatility in the virtual currency market.
Daniel Kostecki, Chief Analyst Conotoxia Ltd.
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