Last month, the large stimulus plan and the acceleration in the vaccination campaign led several Fed officials to forecast interest rate increases next year, while some other officials believe that rates will not be rising until at least 2024.

The taxation of companies, especially tech giants, is also on investors’ minds, since the topic is back in the news. Discussions have started a few weeks ago in Europe and the United States. Under the Biden presidency, this issue is no longer taboo and since the beginning of the week, we have seen a new display of ideas, including raising the corporate tax rate to finance the infrastructure stimulus project, as well as a minimum corporate tax rate globally. Specifically, Treasury Secretary Janet Yellen said yesterday that a global minimum corporate tax could be implemented to ensure that the global economy thrives on a more level playing field when it comes to taxing multinationals.

This is in stark contrast to the America First rhetoric of the previous administration. Joe Biden even quoted a 2019 report that 91 multinationals, "including Amazon," are using legal tricks to "not pay a single cent in federal income taxes." Yellen's statements on the global minimum tax have been applauded everywhere, at the IMF, in Berlin or in Paris. Probably less so in Dublin, in The Hague and in the myriad of British micro-tax havens. Even the boss of Amazon.com supported "an increase in corporate taxes".

According to AlphaValue's research, the oil sector is by far the most taxed sector on the planet, with a rate of over 40%. Mining, automotive and banking follow. The champion of tax optimization outside the technology sector is pharmaceuticals, with a rate below 20%. But this is still above the effective tax rates of the big digital players, which for 2020 are around 14.4% for Apple, 12% for Facebook and 9.4% for Amazon.com.

 

Economic highlights of the day

The final reading of the March services PMI indicators in Europe. In the US, the February trade balance, oil inventories and the minutes of the last Fed meeting.

The euro rose to USD 1.1881. The ounce of gold is back in the USD 1735 area. Oil is yo-yoing within relatively narrow limits, at USD 63 for Brent and USD 59.50 for WTI. The 10-year T-Bond is yielding 1.66%. Bitcoin is falling back to 56,590 USD.

 

On markets:

*J.P. Morgan Chase CEO Jamie Dimon said Wednesday he expects U.S. economic growth to explode through 2023 on the back of vaccine advances and budget spending.

* Britain on Wednesday began administering the Moderna vaccine developed by the U.S. company to offset supply problems with AstraZeneca's vaccine.

* Amazon.com founder Jeff Bezos supported the idea of raising corporate taxes in the United States to fund infrastructure upgrades.

* The cameras on the brand's cars are not activated outside North American countries, the automaker said on Chinese social network Weibo after the Chinese military's decision to ban Tesla from entering its facilities for security reasons.