Week in a Glance: India, Fed, US GDP and Biden's Plans

May 3, 2021

As for the pandemic, the past week was marked by the catastrophe in India, which became the sole and undisputed world leader in the pandemic. In general, we noted a year ago that India, being the country with the highest population density and even in theory unable to organize social distancing, is a powder keg. Yes, it didn't explode last spring, but it does that now. It is very likely that a new type of virus with a double mutation is to blame.

India ended the week with 400K + new infections per day and an increase in the global proportion of cases, which is starting to approach 50% of the global number of cases. We don't think it's worth talking about the collapse of the country's medical system. The capacity of the crematoria is not enough, so they returned to the good old burning at the stake, the result of which was a shortage of firewood. In general, it’s an absolute horror.

Considering that it was India that was the driver of the global economy growth in recent years, it was somewhat strange against this background to see records of commodity markets: copper prices reached their highest level in 10 years, and prices for soybeans, wheat and corn reached their highest levels in eight years.

However, the world is stratified every day more and more. Where vaccination campaigns have been adequately organized, countries are showing rapid economic recovery, which is driving up commodity prices.

Last week, the US reported first-quarter GDP growth, the highest since 2003 (excluding the statistical outlier in the third quarter of 2020).

Optimism was also fueled by a super-successful reporting season, as well as Biden's next plans: this time the US President announced a large-scale "American Families Plan" worth $1.8 trillion. Well, the Fed has traditionally been on the side of the optimists, leaving the parameters of monetary policy unchanged and assuring the markets of the current exchange rate inviolability. That is, the ultra-soft policy as well as an abundance of cheap money has been.

The coming week is interesting primarily with statistics on the US labor market, as well as the results of the Bank of England meeting and figures on China's trade balance.