US stocks showed a steady growth last Friday, thanks to good employment reports for May. Nasdaq rose 1.5%, while S&P 500 and Dow Jones climbed 0.9%.
In addition, the G7 countries have agreed to set the minimum corporate tax rate to 15%, which, on the one hand, is a great achievement in terms of taxation standards for large multinational companies, while on the other hand is a big concession to Joe Biden's proposal of at least 21% tax.
The situation with COVID-19 is also improving, as the latest records show an impressive decline in global incidence. The total number of new cases on Sunday was 327,000, which is the lowest figure since February. In India, the number of new infections was 101,000, while in the US there are only 6,400. UK and France recorded 5,000 new cases.
Going back to the markets, Japan indices gained 0.4% this morning, while China indices dropped by 0.7%, mainly due to unfriendly statements from Biden towards China.
According to Biden, China should not take part in the development of new world trade rules and technologies. He also banned US investors from investing in 59 Chinese companies, which is in line with Trump's actions during his term.
The oil market is also declining, showing a 0.4% decrease this morning. Nevertheless, Brent is trading at $ 70 - $71.50, thanks to growing demand both in the US and in the world. The super-soft policies of central banks helped as well.
At the moment, the S&P 500 is at 4.230 points, but it is projected to close at 4.190 - 4.270 points. Its main driver will be the data on US inflation, which will be released on Thursday. Analysts expect the figure to jump to 4.2%.
Meanwhile, the US index is at 90.10, and is forecast to range from 89.50 - 90.50. The index fell last Friday because of massive sell-offs in the market. And this week, the same scenario could carry on if the Fed continues to ignore the sharp rise in inflation. Although US Treasury Secretary Janet Yellen said an increase in dollar will not be a disaster for the US economy.
Currently, USD/CAD costs 1.2080, but it is expected to fluctuate around 1.1980 - 1.2150.
Upcoming statements from the ECB will also influence investor sentiment, but the chances of seeing an early rate hike is very little, since the EU economy is recovering much slower than the US.
Conclusion: The US market may hit new all-time highs if the inflation report on Thursday turns out better than expected. Statements from the ECB could shake the market as well.