March 22. German economy falls due to antivirus restrictions The Bundesbank said today that the German economy is likely to contract sharply in the first quarter of this year, as due to pandemic restrictions the service sector has suffered significantly and the development of the construction industry has slowed down. Experts point out that a hike in sales tax, which was temporarily cut last year, likely contributed to a significant reduction in construction volumes in January. In its monthly report, the German central bank did not update its forecast for the spring economic recovery and dropped references to the coronavirus vaccination campaign, which was undermined by news of possible side effects. The authorities had previously expected the economy to recover in the spring thanks to a decrease in the incidence of coronavirus and mass vaccinations. The regulator also noted that measures to contain the pandemic in the current quarter are on average more stringent than in the previous one, so a stronger decline in economic production can be expected. Industrial production also declined in the first month of the year, but orders were high and merchandise exports increased.
March 23. Bitcoin can rise to $300 thousand, but then – fall by 80-90% Co-founder and former CEO of BTCC crypto exchange Bobby Lee said that today bitcoin is in a «bull market» and may rise to $300 thousand. At the same time, he warned that the «bubble» could burst after reaching a peak, and the cryptocurrency would fall within the so-called «bitcoin winter», which can last for years. Lee also noted that Bitcoin bull market cycles occur every four years, and this summer, the value of the digital currency could easily rise to the level of $ 100,000 or more. Two of these «bullish market cycles» have already occurred over the past eight years: in 2017, when the price of bitcoin surged from $ 1,000 to almost $ 20,000 in a year, and in 2021, when the price of cryptocurrency sharply reached $ 60,000. The economist warned that the bubble could burst when the price of bitcoin declines. In the crypto industry, this is called bitcoin winter, and it can last anywhere from two to three years. Moreover, the value of a currency may fall by 80-90% of its value at its historical peak.
March 24. Suez Canal blocked: 12% of world trade in question One of the largest container ships in the world, owned by the Taiwanese company Evergreen Marine, ran aground in the Suez Canal, completely blocking traffic on the most important trade route connecting Europe, Asia and the United States to the Middle East. Experts note that about 12% of world trade passes through this channel, 30% of the world's container ships' capacity per year, and about 600 thousand barrels of crude oil from the Middle East to Europe and the United States every day. Moreover, the Suez Canal remains the main source of income for Egypt. At the moment it became known that at the entrance to the canal tankers with oil and liquefied natural gas, container ships with various goods and dry cargo vessels are accumulating. If congestion continues until the end of this week, it will affect the transit of 15 LNG tankers and disrupt the entire shipping schedule. Unblocking of the channel is expected to take several days at best.
March 25. The backlog of vaccinations in the EU was estimated at 123 billion euros Economists believe that the lag of the EU countries from the approved vaccination calendar against coronavirus could cost the European economy about 123 billion euros. The EU is currently seven weeks behind schedule. It is noted that by the end of summer, the EU countries should vaccinate 70% of the population. And in order to achieve this, vaccination must be significantly accelerated. However, problems with the supply of vaccines from AstraZeneca and the refusal of residents of many European countries to vaccinate with this particular drug call into question the success of this campaign. According to experts, France is also seven weeks behind the vaccination schedule, and each week of lag could cost the country's economy 3 billion euros. The current difficulties with vaccination will be discussed at the summit on Thursday by the heads of state and government of the EU countries. It is assumed that politicians will discuss measures to increase vaccine production and accelerate vaccination of the population.
March 26. Experts believe that cars will rise in price because of the Suez Canal blocking Experts believe that blocking the movement of ships through the Suez Canal will inevitably lead to higher prices for cars. It is noted that the incident involving the container ship Evergreen mainly affected the European Union. For three days, a queue of more than 200 ships gathered near the blocked canal. Another part of the tankers headed by a roundabout route around Africa – and this will move the delivery dates by 15 days. Analysts also note that the situation in the Suez Canal may affect the cost of some industrial goods from Europe, including automotive products. The fact is that the increase in costs due to the additional time spent in chartering ships is approximately $8,000 for each container from China. Although this is a small amount, the main problem is timing. Currently, the European markets are already experiencing assembly problems due to the lack of chips. And 15 days of delay can lead to an increase in the cost of cars by 1-2%.
March 30. Consumer Confidence in the US in March rose to its highest in a year According to the analyst firm Conference Board, the consumer confidence index in the US in March rose to 109.7 points from the revised February index of 90.4 points. Analysts had forecast growth in the indicator to only 96.9 points from the initial February value of 91.3 points. In addition, the index has reached its highest value in a year. The index of economic expectations in March jumped to 109.6 points from the revised February index of 90.9 points. The index of economic conditions in March also rose to 110 points from the revised value of 89.6 points in February (originally the indicator was 92 points). The US dollar reacted to such statistics with even greater growth. For example, the exchange rate of the main currency pair EUR/USD is 1.1700, which is the lowest value since November last year.
March 31. ECB sees opportunity to launch digital euro by 2025 The head of the European Central Bank (ECB) Christine Lagarde said that the regulator could launch the digital euro around the middle of this decade, in 2025. In her interview, Lagarde noted that the main task of the ECB is to ensure the correct approach to the process of creating a digital European currency, which can take several years. «This is a technical project and also a fundamental change. We have to make sure we don't break the system, but we will improve it», Lagarde said. The ECB intends to publish an analysis of the 8,000 responses received in a public consultation on a potential digital currency launch. Further, the analysis will be sent to the European Parliament, and then – to the ECB Governing Council, which by the middle of this year will decide whether to continue this experimental work. The final decision on whether to introduce digital currency at all will be made six months or a year after that. The European Central Bank has said it is considering issuing a digital euro to prepare for the digital age. The European Commission, in turn, noted that the digital euro can support the digitalization of the entire EU economy, which is one of the most important elements of the EU's development.
April 1. Owners of container ship Ever Given will pay about a billion dollars in fines The manager of the Suez Canal, Osama Rabia, said that the financial losses from the blocking of the trade route, which arose due to the fault of the container ship Ever Given, would amount to about a billion dollars. This amount will be collected from the owner of the vessel. According to Rabia, the money will go to offset the cost of re-floating the vessel, as well as to cover financial losses caused by the congestion in the waterway. Suez Canal navigation resumed on Tuesday 30 March. Osama Rabia also said that all ships affected by the forced delay will be given a discount of up to 15% for passage. The discount will vary from 5% to 15%, depending on the period of time for which each vessel was forced to stand idle. After the incident, Egyptian President Abdel Fattah al-Sisi ordered the purchase of the most modern and large dredgers and tugs for his needs. Their cost is estimated at $500 million. The very same vessel Ever Given will remain at a stop in the lakes until the investigation is over, the perpetrators of the incident are identified, and compensation and fines are not paid.
April 7. Coronavirus and Emerging Markets The coronavirus pandemic is having a strong negative impact on emerging markets. India yesterday confirmed over 115,000 new cases of Covid-19, a record high in history. If the current trend continues, it means that the peak of the epidemic in India has not yet been reached. The country, which is the world's largest vaccine producer, has suspended exports to other countries in order to vaccinate its citizens. Turkey is also seeing a rapid increase in the daily rate of Covid-19 infection. Almost 50,000 new infections were confirmed in the country yesterday, also a record high. The economies of India and Turkey have experienced high inflation rates even before the surge in infections, so the pandemic could further exacerbate their internal economic problems. At today's meeting, the Reserve Bank of India kept its benchmark interest rate at a record low of 4%.
April 8. US stock markets continued their upward rally Reports on initial and ongoing jobless claims in the US were released today, which turned out to be worse than analysts' forecasts. Moreover, today traders will follow the speech of Fed Chairman Jerome Powell at the IMF, although they do not expect important news from this speech. More information has emerged about the tax changes planned by President Joe Biden's administration. US Treasury Secretary Janet Yellen has previously excited the markets with statements of a minimum international tax - an idea that the EU also supports. It turned out that the 15% tax that it offers will apply only to companies with annual revenues of at least $ 2 billion, which means it will have less impact on the market than previously thought. Tax plan adjustments are beneficial for the stock markets. Today, American stock indices continued to renew their all-time highs, despite disappointing data on unemployment in the country. Meanwhile, AstraZeneca's share price is rising, despite the company's continuing troubles. The European Medicines Agency and the UK Medicines and Health Agency have determined that AstraZeneca vaccine, in rare cases, can contribute to a possible death from blood clotting. Due to the rarity of this problem (20 out of 20 million vaccinations in the UK) and the severity of Covid-19, both agencies still recommend the use of the AstraZeneca vaccine. This optimism is most likely the driving force behind the rise in the pharmaceutical company's stock.
