The suspension of vaccination with the drug from AstraZeneca in Europe and the expectation of the results of the Fed meeting

Intraday volatility decreased in the foreign exchange market, and the stock market slowed down. Investors are looking forward to Wednesday evening when the Fed's economic forecasts will be updated and the results of the two-day meeting will be announced. The market is still looking to the future with caution, suggesting an imminent reduction in stimulus measures.

European currencies, especially the sterling, have come under pressure after the reports on the suspension of vaccination with the drug from AstraZeneca. The slow progress of vaccination in Europe may be further slowed after Germany, France, and Italy coordinated to suspend the use of the vaccine. Now, the pace of vaccinations in the European Union depends in part on the results of the European Medicines Agency (EMA), which plans to make a decision regarding further steps on Thursday. AstraZeneca Plc, in its turn, is insistent on the safety of the vaccine.

It’s not the right time for problems with AstraZeneca, as some European countries are at risk of returning to isolation again. Italy has already introduced tougher measures. There is a rise in the number of infections in some regions of Germany, prompting medical experts to call for tighter restrictions, that is threatening a rapid economic recovery in the second quarter.

In addition, the safety issues of the British vaccine have contributed an additional dose of negativity to the European troubled relationship with the UK government. The trade dispute remains unresolved, which negatively affects the sterling.

The market is trying to ignore the vaccination problems in Europe, considering them as short-term ones. Investors remain focused on a quick economic recovery. However, the growth of the major stock indices has stalled. The S&P 500 struggled to break the annual high of 3.950 and is slowly declining since the opening.

Main market quotes:

S&P 500 (F) 3,958.38 +0.13 (+0.00%)

Dow Jones 32,953.46 +174.82 (+0.53%)

DAX 14,541.95 +80.53 (+0.56%)

FTSE 100 6,782.25 +32.55 (+0.48%)

USD Index 91.922 +0.090 (+0.10%)

Important events:
  • – Germany ZEW Economic Sentiment Index (Mar) at 12:00 (GMT+2);
  • – Eurozone ZEW Economic Sentiment Index (Mar) at 12:00 (GMT+2);
  • – US Retail Sales (m/m) (Feb) at 14:30 (GMT+2).

by Justforex, 2021.03.16

We advise you to get acquainted with the daily forecasts for the major currency pairs.

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.

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