Kaohoon Morning Brief – 23 November 2021

1) Jerome Powell nominated as Fed’s chair for 2nd term

The U.S. President Joe Biden on Monday nominated Jerome Powell for the second four year term as the Federal Reserve’s chair. Lael Brainard will act as the vice chair of the Federal Reserve.

“While there’s still more to be done, we’ve made remarkable progress over the last 10 months in getting Americans back to work and getting our economy moving again,” commented Biden.


2) Market pricing-in full rate hike by June 2022

The equity market is now pricing-in a full rate-hike by June 2022, which is a month before an estimated timeline of asset tapering to end in July. Meanwhile, the market is also pricing in almost three rate hikes by December 2022 as inflation runs higher amid tight supply chains from Covid-19 pandemic.


3) U.S. has no plans for lockdown amid resurgence of Covid-19

The Biden administration stated that White House has no plans to curb future Covid-19 surges using a nationwide lockdown as the Covid-19 infection in the U.S. saw an uptick in recent weeks with a 7-day average of 93,000 cases, compared to 72,000 cases in early November. Meanwhile, some countries in Europe are entering a nationwide lockdown again amid surging Covid-19 cases.


4) Oil prices fell amid surging Covid-19 and reserves release

Oil prices fell in the morning of Asian trading session on Tuesday, pressured by rising Covid-19 cases in Europe as Austria went into another nationwide lockdown and Netherland implemented a partial lockdown.

Japan said it is weighing the decision to release oil reserves, responding to the call from the U.S. to curb rising oil prices. China said last week that it was also going to release its reserves as well.