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06 Mar 2021
3 min read

The Week in Review

The Week in Review

*OspreyFX would like to state that traders should research extensively before following any information given hereby. Any assumptions made in this article are provided solely for entertainment purposes and not for traders to guide or alter their positions. Please read our Terms & Conditions and Risk Disclosure for more information.

Key Takeaways

  • Investors take a risk-off approach, spooked by rising prices
  • US stimulus bill undergoing formal consideration
  • Bitcoin trading below $50,000

The past week brought a return of volatility to the financial markets. US equities continued their wild gyrations, influenced by the Fed Chairman Jerome Powell’s comments on Thursday and the eagerness over the anticipated stimulus package.

While the US Senate entered into a formal discussion over the $1.9tn fiscal stimulus proposed by President Biden, Federal Reserve Chairman Jerome Powell confirmed that the central bank will keep its monetary policy unchanged even as the economy improves. The news quickly reverberated around the market on Thursday, causing major indexes to slide, while Treasury yields climbed again above 1.5%.

On the stimulus package, on Thursday, Kamala Harris broke a tie in the US Senate over whether to proceed with a debate on President Biden’s $1.9tn proposed stimulus package. All 50 Senate Republicans voted against a debate over the stimulus bill. For the proposal to pass, all 50 Senate Democrats will need to vote in favor, with Kamala Harris casting the tie-breaking vote.

Moving to the other side of the Atlantic, UK Chancellor Rishi Sunak vowed to protect jobs by unveiling more support for workers and businesses. Mr. Sunak proposed a £5bn scheme for High Street shops and hospitality firms in England that will help them go through the pandemic lows. Additionally, he stated that the rate of corporation tax, paid on company profits, is expected to rise from 19% to 25% for businesses earning more than £250,000, which is about 10% of firms.

Meanwhile, Europe continues the race to vaccinate as many people as possible while trying to find ways to receive more vaccines from producers. AstraZeneca has been at odds with the bloc for its failure to meet the agreed target of 40 million doses for the first quarter.

Cryptocurrencies had a relatively contained trading week as crypto enthusiasts relaxed a bit. Bitcoin remained subdued below $50,000 as investors became increasingly concerned over the digital asset’s hedging properties on the back of rising price pressures. The risk-off mode was prevalent in the week across US and European equity markets as well as the crypto space.

In the currency market, the US dollar strengthened significantly against competitors, while Gold hovered around its weekly lows near $1,700.

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