US stock market indices continue to grow, despite the fact that the Republicans and Democrats failed to reach an agreement on a new package of economic assistance. However, House Speaker Nancy Pelosi and Treasury Secretary Steven Mnuchin have expressed readiness to continue negotiations aimed at adopting a package that will include programs on which the parties have no disagreements. Meanwhile, Donald Trump issued four executive orders aimed at providing economic assistance to Americans hardest hit by the pandemic. In particular, orders provide an additional $400 weekly payment to unemployment benefits and deferral of payroll tax payment. Democrats questioned the legality of these orders and are likely to initiate legal proceedings.
The stock market was boosted by positive macroeconomic data. On Friday, data on employment was presented, which turned out to be better than expected.
The absence of agreement on the new economic stimulus package, as well as growing tensions between the US and China, contributed to increased demand for safe-haven assets, boosting the dollar, which entered into the phase of upward correction after reaching 2-year minimum.
USD/TRY reached a new historical maximum last week. Devaluation of the Turkish currency has been taking place amid growing current account deficit, a lack of tourists, geopolitical risks, and unsuccessful currency interventions made by the central bank.
Main events of the current week
- On Tuesday, data on claimant count change and average earnings in the UK, German economic sentiment index, and producer price index in the US will be published.
- On Wednesday, data on UK GDP and industrial production, consumer price index in the US, and crude oil inventories will be presented. The Reserve Bank of New Zealand will hold a monetary policy meeting.
- On Thursday, data on employment change in Australia and jobless claims in the United States will be released.
- China’s industrial production and US retail sales are due on Friday.