By Geoffrey Smith and Peter Nurse
Investing.com – The U.S. office could well take a more proactive stance on cryptocurrencies, in addition to global corporate tax levels. Wall Street stock indices are likely to continue the recent rally after the weak start to the week, while the crude oil market is annoyed by the potential for additional Iranian supply. European PMIs suggest an economic recovery in the region. Here’s what’s moving the markets on Friday May 21st.
1. Crypto treasury
Forget Elon Musk, Bitcoin must worry about Janet Yellen. The Treasury Department said Thursday that all crypto transactions over $ 10,000 should be subject to reporting to be in line with cash transactions.
A statement said the move is “intended to minimize the incentives and opportunity to extract income from the new information reporting system”.
The news pushed Bitcoin back below $ 40,000, a level also close to its 200-day moving average, a key indicator of momentum, although it has since rebounded. As of 6 a.m. CET (1000 GMT), the world’s largest digital currency was trading at $ 40,895. plus 2.2% per day.
Separately, Federal Reserve Chairman Jerome Powell said the Fed would release a paper this summer on its own suspected digital currency, which he emphasized as a complement to the existing dollar, not a replacement for it.
2. Minimum tax
Yellen was a very busy woman yesterday. The Treasury Secretary also followed up on her proposals to reform US corporate taxes, proposing a global minimum tax of 15% on corporate income.
The proposed 15% rate is lower than the 21% rate previously proposed by Yellen for the profits of US companies overseas and is seen by some as reopening the door for US companies seeking overseas domicile for reporting purposes. However, it is still above the minimum tax rates used by countries like Ireland and Luxembourg and may meet with European opposition as a result.
The story goes on
3. Stocks continued to rally; Applied materials (NASDAQ: AMAT) in focus
US stocks are expected to open marginally higher on Friday, continuing the previous session’s rebound from a three-day losing streak as investors rebounded from the surprise of minutes from the Fed’s final meeting and touched the idea of bond tapering.
A new pandemic low in unemployment claims added to sentiment on Thursday, but the surge in persistent claims also meant the central bank will remain in good spirits for some time to come.
By 6 a.m. ET, the Dow Jones futures were up 90 points, or 0.3%, while the S&P 500 futures were up 0.3% and the Nasdaq 100 futures were up 0.3%.
Among the stocks expected to be in focus later is Applied Materials, whose quarterly report after the bell on Thursday reflected continued strong demand for chip manufacturing devices. Foot Locker (NYSE: FL) and Deere (NYSE: DE) are leading a dwindling number of reporting companies.
4. PMIs for Europe indicate the restoration of services
Europe’s economic recovery accelerated in May as services came back to life after a slowdown in manufacturing.
IHSMarkit’s composite PMI for the euro zone rose to 56.9, its highest level in over three years and above analysts’ expectations as the services PMI rose to 55.1 from 50.5 in April.
In the UK, the composite PMI rose from 60.7 to 62.0, as expected, with both manufacturing and services indexes well above 60.
The euro was unchanged at just over $ 1.22 while the pound consolidated near its weekly high at just over $ 1.42.
5. The potential Iranian supply depends on the crude oil market
Crude oil prices traded higher on Friday, recovering from three days of selling. However, they are expected to see a weekly decline as the market prepares for additional supply from Iran.
At 6 a.m. ET, US crude rose 1.2% to $ 62.66 a barrel, while Brent rose 0.9% to $ 65.72. Both contracts are still down more than 5% and on track to post their biggest weekly loss since March.
Iran and the world powers have been in talks since April on the revival of the 2015 nuclear deal that constrained the Persian Gulf country’s nuclear ambitions, and there were positive noises this week of progress from both Iranian and European circles.
If the US went on board, there could potentially be an additional 1 million barrels of Iranian barrels per day on the market later in the year.
In addition to worries about supplies, the number of active oil rigs Baker Hughes counted across North America has steadily increased in recent weeks. The company’s last weekly update is due as usual at 1:00 p.m. CET, while the CFTC releases its weekly report on traders’ commitments at 3:30 p.m. CET.
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