The key stages of the financial market in 2021

The year 2021 has been filled with exciting developments and significant circumstances in global affairs – its economy, politics and policies – impacting the financial industry as a whole. With the help of its analysis team, the international Forex broker OctaFX compositionHe wrote a basic outline to deliver some of the most critical vital events that he felt were particularly important.

The US Dollar’s Rocky Journey Under Quantitative Easing (QE)

During the COVID-19 crisis, the US Federal Reserve (Fed) and the European Bank The Central Bank (ECB) — the central banks that issue the world’s reserve currencies — has flooded the financial markets with new money. The official reason given was to help the economy ailing due to the pandemic.

Therefore, US President Joe Biden’s proposalThe sale of a $1.9 trillion stimulus package to Congress arrived on January 21. The Republican Party was very skeptical of this approach – some members of Congress even recalled the already worrying continued growth of the national debt (a massive total of 21.6 trimillion US dollars at the time). This is a long-term development whose lack of resolution at this time does not shake the market’s firm belief in the reliability of the US dollar.

Biden follows suit by signing stimulus package

Fast forward two months, the US Senate (March 6) and the US House of Representatives (March 10) both approved the stimulus package before Biden signed it on March 11 as a $1.9 trillion economic rescue package. Far from being a bipartisan endeavor, no Republican has endorsed the new order. Goodugh the document has been changed, for example, the clause on increasing the minimum wage has been removed. Fresh money flooding the market like this has filled most market players with bullish sentimentt.

Additional $1.2 trillion for ‘Infrastructure Spending Plan’

ATTowards the end of June 2021, expectations for tight monetary policy were high, but the US Senate then agreed and approved a new “infrastructure spending plan”, totaling another $1.2 trillion. The reason for this was a sharp increase in inflation inthe months before June.

Both institutions – the Fed and the ECB – have kept rates at zero or negative and implemented quantitative easing (QE) throughout 2021, expanding their balance sheets and buying bonds with that money. Therefore, their yields fell, prompting investors to invest in company stocks and look for other projects.

The Fed announces the end of bailout measures

In September, the US Federal Reserve officially declared that it was ready to end its quantitative easing programsoul and could increase the base rate already from 2022 rather than 2023, as previously assumed. The Fed further added that it will continue to buy $120 billion in assets each month for now: $80 billion in Treasuries and $40 billion in mor.bonds backed by bonds.

The regulator’s rhetoric initially spooked investors, but overseas markets rose on Sept. 23. The US S&P 500 was recovering from a marginal fall and was up 1%. Finally, the US monetary regulator has started to relax market purchases of assets at USD 105 billion in November (compared to USD 120 billion previously) and at USD 90 billion in December, strong signals for the market that the economy is beginning to revitalize.

Bitcoin hits historic ATH in April ahead of fafill up again by 53%

Throughout April, the crypto industry beamed with excitement over an ongoing bull market before bitcoin – surprisingly for the most part – began a sharp correction from an all-time high of 63,500. USD (April 13, 2021) to USD 34,600 (29 MMay 2021). During these first initial downward waves, due to triggered margin calls, approximately USD 8 billion in position liquidations took place. This process had put most of the trading community on a new kind of vigilance.

This downward trend continued until July 20, 2021, reaching a price of USD 29,600 per bitcoin (this is more than 53% from the previous all-time high). It was only after this point that an uptrend began with a late summer high of $52,600 (Sept 6, 2021). Most were sure tBitcoin’s bottom at the time had been reached, and more frequent but cautious trading resumed during this time.

Ethereum Remains Strong But Stable While Bitcoin Surpasses Twice As Much

Six weeks later, the mother of all cryptocurrencies crowned its previous all-time highThe top hit twice in a row – $65,990 (October 20, 2021) and $67,500 (November 8, 2021), once again justifying a suspected bull market among market watchers, retail investors and legacy institutions. All the while, the altcoin market has crashedn with a fluctuating performance, seeing the persistence of Ethereum and some success stories like the Solana smart-contract platform. The latter went from 1.84 USD on January 1 to it is all-time high of $258.93 on November 6, up 13,972%. Many opportunitieslucrative transactions and initial long-term investments have been made. At the same time, some solid altcoin projects have stagnated during this period, only showing that their turn of growth has not yet come.e.

USA and EU to prioritize basic materials sector

In the fall, the EU and the US agreed to suspend tariffs on steel and aluminum some products. During a speech, the President of the European Commission, Ursula von der Leyenpointed out that his instituteion planned to develop proposals to suspend the duties imposed on goods from the United States. She clarified that this would lead to trade in steel and aluminum products to their levels before the imposition of these tariffs in 2018.

US President Joe Biden reiteratesd the intentions of the European Union and the United States to jointly commit to a carbon agreement on steel and aluminum Trade. After President Trump’s era of ‘economic isolationism’, many investors in relevant industries have realized this development as a long-term bullish sign.

The European Union at a crossroads

In the fourth quarter of 2021, the euro fell to its lowest value since the beginning of July 2020. The reason for this dip was the deterioration of the business climate in the EU

In Germany, supply problemthe problems within most industries have worsened. Berlin, as the world’s fourth largest economy, also inaugurated its new government in December. An important goal of the new coalition is to introduce a wide variety of new taxes on secondary property ancarbon emissions on all levels, be whether corporate or private. Germany is a major player in the structure of the power dynamics of the European Union. His new government in Berlin will have a lot to say about the way forward in terms of the continent’s finances and polithic development.

What the future holds

As Powell has hinted throughout the year, in January 2022 there will be a monthly quantitative easing cap of $60 billion, halving the 2021 rate and initiating a likely, gradual farewell to the emergency policy.y. A process that market players of all shapes and sizes (individuals and businesses) will need to pay close attention to.

All of the above dynamics will have exciting new developments in 2022 and beyond, many of which will strike the most by surprise. So, Financial education and constant research and training in economic and financial literacy are paramount to navigating these rapidly changing markets. This plain truth applies just as much to the foreign exchange market as it does to the stock market or the cryptocurrency domain.

OctaFX is a global broker that has been providing online trading services worldwide since 2011. It offers cutting-edge trading experience to over 7.5 million traders worldwide. The company is well known for its financial expertise, analytics and education program. She values ​​financial literacy in her business community. OctaFX Has also won more than 45 awards since its inception, including the 2021 ‘Best Forex Broker Asia’ award and the 2020 ‘Most Transparent Broker’ award from Global Banking & Finance Review and Forex Awards, respectively.

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