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The recent improvement in economic situations resulting from the ongoing vaccine rollout in the United States, Europe, and other advanced nations has transformed the mood to one of optimism, as global economic recovery is now expected to accelerate. Even while things appear to be getting better, we are still going through a difficult moment because we are now dealing with losses as a result of the epidemic, and governments and central banks will have to put in a lot of work to fill up the gaps.


Countries must also regard the world as a whole at this level, rather than focusing on their own well-being. As a result, improvement must be made on a larger scale rather than on an individual basis, which might be problematic. This article will concentrate on the world's top economies and the most recent advances in their respective areas. There will also be a brief summary of each person's development in May.


United States Biden’s $6 trillion budget proposal


The markets' attention has recently switched to Vice President Joe Biden's $6 trillion budget proposal. The Biden administration is carrying through its early plans to provide considerable economic support. Military, infrastructure, education, scientific research, and renewable energy will all benefit from the funds. Budgets for these sectors are expected to expand, and plans are expected to stretch out in the coming years as monies are distributed progressively.


Importantly, the Biden administration intends to promote wealth equality by enacting a new tax policy that will favor the wealthy. Of course, efforts to assist environmental protection are included, such as lowering greenhouse gas emissions, which might benefit the green energy sector while harming or forcing other industries to adjust. Furthermore, the relatively significant fiscal package will be utilized to boost the United States' worldwide technological position in order to compete with China, which is also on the rise. From an economic standpoint, the Manufacturing and Services PMI readings in the United States improved dramatically in May, with a special focus on the latter, which made remarkable gains.


Finally, the Preliminary Core PCE Prices, a key gauge of inflation, rose in Q1, indicating that the US economy is gearing up for a new post-pandemic period program. Inflation is always on the minds of investors, with the Federal Reserve becoming involved and possibly taking measures to keep inflationary pressures in check. The dollar appears to be stabilizing at yearly lows, causing other major currencies to rise.


Europe seeing light at the end of the tunnel


According to the Wall Street Journal's World in Data, daily verified new cases in the block plummeted by roughly two-thirds between April 14 and May 19, indicating that Europe is now seeing the light at the end of the tunnel. Despite the fact that the block's delay in vaccine deployment may have an impact on its economic performance in the short to medium term, the results thus far indicate that the situation is steady. Preliminary Consumer Confidence in the Eurozone improved in May, as did services, economic, and industrial morale. Furthermore, Germany's Ifo Business Climate New, Current Conditions, and New Expectations increased in May, as did its ZEW Indicators, but its Manufacturing PMI, which is a key indicator, fell. Because the overall numbers for the union are positive, the estimate for the Eurozone economy to recover to pre-pandemic size by the end of the year appears to be within reach. This may be deemed a win because the block was expected to be in place until 2022 before rebounding. In April and May, the EUR outperformed the USD, regaining much of the territory lost in the first three months of the year.


The United Kingdom reopening the economy on 21 June


Britain's recovery from the pandemic was also visible, with the economy continuing to strengthen. Some observers feel that the combination of vaccination and good economic statistics signals a turning point in business and other key areas of the economy. Despite the positive economic outlook, UK officials such as Prime Minister Boris Johnson and Health Secretary Matt Hancock expressed reservations about fully reopening the economy on June 21 because the Indian coronavirus variant continues to pose a serious threat to the country due to its rapid spread. On May 17, some lockdown measures were eased, allowing residents to assemble indoors for the first time in months, as well as visit pubs and restaurants.


This has resulted in a small increase of new covid-19 cases across the UK, which is a cause for concern. Despite the fact that results of a study into the impact of the Indian Variant on the nation will be disclosed in the coming weeks, some media sites claim that a late rise in cases in the UK may necessitate tighter lockdown measures. In terms of pure economics, the UK Manufacturing and Services PMIs improved in May, while the country's annual GDP rate improved as well. Finally, the GBP appears to be holding firm against the USD, even seeking to break through to the upside in recent weeks.


China The raw material worries


Despite the fact that China has a head start this year in terms of being able to contain the pandemic within its borders, some analysts say the Mainland's economic performance is currently flattening. The latest NBS Manufacturing PMI for May came in lower than predicted, causing market participants to react. At the present, a number of major news outlets are claiming that China is being impacted by rising raw material prices.


Furthermore, the price of industrial metals such as copper grew to the point that manufacturers were unable to raise their selling prices, escalating concerns that a rise in commodity prices would reduce profitability. It is unclear whether this condition will remain, given the Chinese had warned the market the previous week to keep raw material prices low, and some of these prices had already plummeted. As a result, we couldn't overlook China's purchasing power, as well as its influence and impact on world prices. The Australian dollar, which is closely linked to China since the two countries trade goods, has remained constant against the US dollar, moving in the same range since the beginning of the year.