World Central Banks Keep Stimulating the Economy of Countries

by JustForex

Analysts at Morgan Stanley expect that the total balance of the central banks of the G4 countries – the Fed, the Bank of England, the Bank of Japan, the ECB – will increase to $29 trillion by the end of the year, which is almost twice as high as at the end of 2019.

Central banks have launched massive promotional programs earlier this year to limit the impact of business shutdowns implemented to contain the spread of the coronavirus. While recent positive news about vaccines has consolidated hopes for a quick global economic recovery, there is still a long way to go before economic activity reaches pre-pandemic levels. Analysts say that central banks are unlikely to suspend or reduce stimulation in the near future.

The UK will borrow nearly £400 billion to pay for a massive coronavirus strike on its economy this year, treasury secretary Rishi Sunak said, as far as the budget deficit jumps to its highest level since World War II. This points to the fact that the UK economy has been hit hard by the pandemic and will take a long time to recover.

Oil prices have started correcting after its rapid growth. Correction of WTI oil is expected to reach $43.50. WTI oil prices are trading at $45.22.

Market indicators

On Wednesday, the US stocks indices S&P 500 and Dow declined as far as an unexpected increase of jobless claims raised fears of a labor market recovery and reduced risk appetite.

On Wednesday, the Dow Jones index closed down with a decrease by 0.58% to 29.872.47 points, the S&P 500 – by 0.16% to 3.629.65 points, while the Nasdaq rose by 0.48% to 12.094.402.

As a result of the growth of the jobless claims, the dollar index showed a declined dynamic and dropped to 91.92.

The 10-year government bonds yield remains stable at 0.88%.

It is worth paying attention to the news feed for today. At this time, we recommend limiting your risks in positions. It is also worth noting that the US is on holiday, so there is low price volatility expected today.

• – ECB Monetary Policy Meeting Accounts at 13:30 (GMT+2);
• – ECB Monetary Policy Statement at 14:30 (GMT+2).

by JustForex

This article reflects a personal opinion and should not be interpreted as an investment advice, and/or offer, and/or a persistent request for carrying out financial transactions, and/or a guarantee, and/or a forecast of future events.