Daily summary: ECB did not surprise, Biden wants to raise taxes significantly!

7:28 PM April 22, 2021
  • ECB left monetary policy unchanged
  • Biden's wants to double capital gains tax
  • Mixed data from the US

The European Central Bank did not surprise as much as the Bank of Canada did yesterday. The ECB kept the monetary policy unchanged, while pointing out that, in line with earlier assumptions, it would accelerate the pace of asset purchases. As one can see, there was no room for policy normalization here, which was also emphasized by Lagarde, which said that the ECB is very far from its target compared to other central banks such as the Fed or the BoC. The euro was relatively volatile during today's meeting, but in the end we observed a clear pull back to 1.20 level.

The data from the United States was mixed. On the one hand, claims have dropped to their lowest levels since the start of the pandemic, showing that opening up the economy is having a positive effect. On the other hand, data on existing property sales showed a further decline this year, indicating that housing price inflation may be too high for US consumers. Today's strong declines on Wall Street are related to the proposal of strong tax increases on capital gains and the highest income tax threshold.

Grain prices are clearly rising in response to excellent US export data. China is taking over the leadership in corn imports, surpassing, for example, the European Union. Additionally, uncertainties about the US drought have a positive effect on prices. The prices of other commodities were mixed. Oil pauses after yesterday's sell-off, while gold is retreating after yesterday's strong gains to around $ 1,800 an ounce. Currently, gold is trading around $ 1,780.

Gold – buyers failed to break above the major resistance at $1800.00 and price pulled back. The nearest support  lies at the lower limit of the ascending channel and coincides with 50 SMA (green line). On the other hand, if buyers will manage to regain control and break above the aforementioned resistance, then next target for bulls is located at $1817.Source: xStation5

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