Biden’s expected stimulus boosts markets, Powell, jobless claims eyed

Reports that Biden’s is set to announce a $2 trillion package have been boosting markets and weighing on gold. Investors are shrugging off Trump’s second impeachment and eyeing a speech from Jerome Powell, jobless claims, and coronavirus headlines.

President-elect Joe Biden is set to introduce an aid package worth around $2 trillion, a significant top-up to the recent $900 billion relief approved by Congress. Stocks are on the rise in anticipation of a stronger economy and US bonds are sold off. The increase in yields is relatively moderate and the greenback is stable. Gold has dropped sharply in response to rising yields, falling to new weekly lows at $1,827.

President Donald Trump was impeached for the second time in his term amid his role in the Capitol riots. Ten House Republicans voted with Democrats, but the Senate is unlikely to hold a trial before January 20, allowing Trump to conclude his term. Markets are focused on Biden’s plans rather than the political drama.

Jerome Powell, Chairman of the Federal Reserve, speaks later in the day and will likely convey a message of stability regarding the Fed’s bond-buying scheme. His colleagues have been talking about the possibility of tapering the scheme, somewhat boosting the dollar.

US initial jobless claims are set to stabilize below the 800,000 level as the US economy continues struggling with covid.

Vaccine: Johnson and Johnson said that its one-shot immunization scheme is 90% efficient some 29 after the injection. The pharmaceutical giant’s encouraging results are offset by manufacturing delays but may deploy later in the quarter. AstraZeneca said its two doses can be administered with a gap of 8-12 weeks.

Europe: Germany reported another daily death record and the end to the lockdown is out of sight. The European Central Bank releases its meeting minutes on Thursday, and it may repeat President Christine Lagarde’s message that uncertainty has receded.

UK: Prime Minister Boris Johnson is under growing pressure to tighten restrictions once again as pressure on hospitals intensifies. Covid mortalities hit a record on Wednesday, but infections show tentative signs of falling. GBP/USD remains buoyed by Britain’s accelerated vaccination campaign and by hawkish words from the Bank of England early in the week.

Chinese exports have increased in December, showing the strength of the world’s second-largest economy. A World Trade Organization delegation has arrived in Wuhan to investigate the origins of COVID-19.

Cryptocurrencies have resumed their gains after consolidating on lower ground. Bitcoin is trading above $37,000, Ethereum above $1,100 and XRP around $0.30.

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