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Weekly financial market overview 08.02.-14.02.

News - February 15, 2021

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Konstantins Goluzins, CFA



Head of Asset Management
Phone.: (+371) 6700 0456
E-mail: trust@bib.eu

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Main events of the previous week

 

The head of the Federal Reserve System (FED) Jerome Powell, speaking at the Economic Club of New York, said that the return of the US labor market to the levels reached before the beginning of the pandemic could take "many years." Jerome Powell explained that from the very beginning of the pandemic, the FED was concerned about its long-term implications for the labor market. Long periods of unemployment can seriously damage a person's life as well as undermine a country's economic potential. Past experience has shown that recovery can take many years. The head of the FED added that at the beginning of the pandemic, in February 2020, the US unemployment rate was 3.5%. In April 2020, it reached a maximum for the entire pandemic period - 14.8%, and by January 2021 the unemployment rate dropped to 6.3%. In 2020, U.S. GDP fell 3.5%, the worst since World War II.

The US Senate vote on the impeachment of former President Donald Trump on Saturday, February 13, ended with the ex-head of state's acquittal. 57 out of 100 members of the upper house of the American parliament voted to remove Trump from the presidency. However, for the impeachment to take place, a two-thirds majority was needed, which corresponds to at least 67 congressmen. The impeachment proceedings against Donald Trump were launched by the House of Representatives of the Congress while Trump was serving as president of the United States. However, due to a lack of time, the Senate was forced to consider this issue after the inauguration of the new head of state, Democrat Joe Biden, who won the election.

Economic data

 

US. The number of initial jobless claims for the week was registered in the amount of 793 thousand, which is 19 thousand less than the week before and 43 thousand more than predicted by analysts.

The consumer price index in January increased by 0.3% against December, while the annual inflation rate was 1.4%. The growth of the core inflation rate excluding food and energy resources in January was also 1.4% y/y.

China. The consumer price index in January increased by 1% versus December, while the annual inflation was negative and amounted to -0.3%.

Key events this week

  • On Monday, the Eurozone will publish data on the trade balance and industrial production for December.
  • On Tuesday, the Eurozone is to publish data on the recalculation of GDP for the fourth quarter of 2020.
  • On Wednesday, the US is to publish data on retail trade and industrial production for January, as well as minutes of the last Fed meeting.
  • On Thursday, the US will publish the number of initial jobless claims for the week, as well as the change in oil inventories for the week.
  • On Friday, the state of the business environment in February will be published in the Eurozone and the US.

The information provided herewith has an informative nature. This information cannot be regarded as an offer or recommendation for purchase, storage or sale of securities, or as an investment recommendation, an investment survey or a consultation on investments, or a recommendation to entrust management of your assets to the specific investment manager. The Client is fully aware and undertakes all risks involved in the investment. This information is prepared by AS Baltic International Bank.

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