What happens to inflation after the epidemic ends?

By 18/03/2020News
Morning Stock News

Gold   1513,15
(-1,33%)

EURUSD   1,1026
( +0,10%)

DJIA   20158,50
(-2,39%)

OIL.WTI  26,875
(-1,52%)

DAX   8869
(+ 0,05%)

Nobody has thought about this question yet, but it’s time! Not a day goes by without new cash injections into the economy and markets. On Tuesday afternoon, the U.S. announced that it would buy back commercial papers from the market for $1 trillion and help the population for $850 billion. All this happens against the background of a huge drop in production and asset prices. Naturally, there is an idea that immediately after the end of the pandemic, prices for everything will start to rise. And right now, the price of food will start to rise.


AUD/USD chart of the day

AUD-USD chart of the day


STOCK MARKETS

However, the decisions made in the USA gave the market a little rest. Stock indices are growing synchronously. The main question is, how long will the optimism last? Fundamentally, the situation just keeps getting worse.


AUSTRALIAN DOLLAR

Against the background of falling stock markets no one paid attention to the extremely significant event. Above we see the AUD/USD monthly chart. Against the background of the October 2008 crisis, the pair dropped to the level of 0.60, but failed to break it down, and went up, almost doubling in a few years. On Tuesday, the bears did what they failed to do 12 years ago. The 0.60 was broken through. The previous long-term lows were as early as 0.477 in 2000.


BITCOIN

As we noted yesterday, Bitcoin continues to feel very confident. For a better understanding of the situation, let’s compare the gold market worth $7 trillion with BTC’s market capitalization, which is currently less than $100 billion. In theory, one large fund can buy back all existing Bitcoin on the planet. Of course, this will not work in reality, as the price will start to rise rapidly.That is why, thanks to the inflation-free model, BTC is much more attractive for long-term investments than yellow metal.


What is waiting for us today?

11.00 EU basic consumer price index for February
14.30 Canada’s basic consumer price index for February
15.30 U.S. weekly change in oil product stocks


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