G7 countries have agreed to tax multinational companies. They acceded to make the minimum corporate tax rate to at least 15%, in order to raise money that would help governments cope with the after-effects of COVID-19. Key details are yet to be clarified, but the deal is expected to reduce tensions between many countries.
What is clear though is that companies will also have to pay more tax in the countries where they make sales. Most likely, these will be tech giants such as Amazon and Facebook.
On a different note, US Treasury Secretary Janet Yellen said President Joe Biden plans to push forward his $ 4 trillion spending plan despite the fact that it could trigger inflation. She added that ending the year with slightly higher interest rates would be positive both to society and the Federal Reserve.
Many authorities also believe that the ongoing price hikes will be short-lived, although there are some, mostly Republicans, who are convinced that adopting more stimulus would further fuel inflation.
But Yellen claims that spending $ 400 billion is not enough to push inflation beyond its target level, and that any jump in prices will disappear as early as next year.
With regards to other macro statistics, the latest data on employment was somewhat disappointing because on the one hand, the amount of new jobs was much lower than expected, while on the other hand, the unemployment rate has dropped, which could force the Federal Reserve to consider an early curtailment of its bond purchase program.
The US Department of Labor said the number of non-farm workers jumped 559,000 in May instead of the projected 650,000. All in all, employment is still 7.6 million below pre-pandemic levels, which means that it would take at least 12 months to return to previous levels.
But in terms of employment in the leisure and hospitality industry, a significant growth was recorded. About 292,000 jobs were added every month, reducing the unemployment rate to 5.8%. Average hourly wages also rose 0.5% in May, pushing it to $ 30.33. Annual wage growth accelerated to 2.0%.
Cleveland Fed President Loretta Mester said the central bank will wait for more employment data before they will consider cutting back on their bond purchase program. And in the latest minutes, the Fed said it would begin reducing its monthly purchases by $ 120 billion only after there has been "significant progress" in inflation and employment.
Another important report was the data on new orders, which showed a significant decline last April. According to the data, manufacturing orders fell 0.6% because orders for durable goods fell 1.3% and orders for transportation equipment dropped 6.6%.
All this pushed euro to 1.2190, where a lot will depend today. A break above this level will result in a much larger jump to 1.2215 and 1.2250, while a consolidation below will lead to a collapse to 1.2150, and then to 1.2120.