The biggest news on Tuesday turned out to be concerns about the Johnson & Johnson (NYSE:) vaccine and not the U.S. inflation report. The country’s two health agencies (FDA and CDC) recommended halting use of the one shot vaccine after 6 cases of a rare but deadly blood clot disorder. Six cases is small when measured against the nearly 7 million Americans that have received the Johnson & Johnson vaccine but coming off the heels of similar concerns related to AstraZeneca's (NASDAQ:) shot, regulators are being very cautious as the disorder may appear up to 2 weeks from vaccination.
Even if the FDA and CDC deem the vaccine safe after an investigation period, this revelation will increase vaccine skepticism / resistance, dealing a blow to the government’s accelerated vaccination plans. This is bad news for stocks, which ended the day lower and the which gave up earlier gains.
U.S. rose 0.6 percent in the month of March with rising 0.3 percent. While these increases were more than expected, investors worried about a much larger upside surprise. The more modest increase made it easier for everyone to heed the Federal Reserve’s guidance and look past the rise.
Thursday’s report is the most important piece of U.S. data on this week’s calendar. With a sharp increase in spending expected, the dollar’s decline may be limited. The Fed’s report will also be released on Wednesday and optimism is widely anticipated.
After the J&J news, the reversed its slide to end the day higher against the greenback. German fell more than expected in April. Widespread lockdowns and slow vaccine rollout caused the country’s ZEW survey of investor sentiment to fall to 70.7 from 76.6. Not only was this the first drop since November but economists were looking for an increase. The Eurozone also dropped from 74 to 66.3.
Euro outperformed because U.K. expanded less than expected in the month of February. The economy grew 0.4% against 0.6% forecast. increased but the deteriorated significantly. Still, with outlook brighter for U.K. than the Eurozone, we expect this outperformance to be short-lived. The near term trend for remains lower.
The traded higher against the greenback ahead of the Reserve Bank . The RBNZ left policy unchanged. Although the government recently took steps to cool the housing market, the central bank will be keen to keep a lid on interest rate expectations by downplaying any speculation about premature tightening. The and dollars failed to rally despite higher prices. AUD was set back by weaker .
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