FXTM information and reviews
FXTM
93%
IronFX information and reviews
IronFX
92%
Libertex information and reviews
Libertex
91%
FXCC information and reviews
FXCC
90%
Markets.com information and reviews
Markets.com
89%
FxPro information and reviews
FxPro
88%
EUR/USD
1.1720
BTC/USD
42 648.00
GBP/USD
1.3685
USD/JPY
110.7470
USD/CHF
0.9235
USD/CAD
1.2661
EUR/JPY
129.7966

Once again, fiscal stimulus takes centre stage


14 January 2021

Investors do not seem bothered by Washington's political turmoil. Trump became the first US President to be impeached twice, a little more than a year since his first. While he will most likely continue to serve the remaining six days of his term, his political future is now uncertain with a high possibility that he is barred from running for the presidency again if he is found guilty of incitement of insurrection.

Global equity markets inched slightly higher on the (second) impeachment day with US stocks continuing to hover near their record highs. Political noise is apparently of the least concern to investors who are looking forward to strong economic growth in 2021 and another big stimulus package from the new US administration.

According to Biden aides, the President-elect is set to reveal his plans for a COVID-19 relief package later today, which is likely to be somewhere near $2 trillion. The package will include significant funding for vaccine distribution, an extension to eviction moratorium, support for the unemployed, government aid and another sizable direct payment to American families. The latter is likely to be the trickiest part as most Republicans and some Democrats are against going too big. On the other hand, opting for a small package will disappoint investors and lead to profit-taking in equity markets. Finding the right balance will not be easy.

While political instability in Washington has so far been ignored, there remains a risk of profit-taking if violence on inauguration day escalates, especially as markets are almost priced to perfection. With valuations extremely overstretched, some investors need an excuse to book their profits and 20 January may provide this.

Another risk investors need to keep an eye on is how high bond yields go from here. The good news is we are not yet seeing significant inflationary pressure reflecting in data. US consumer prices rose 0.4% in December and when excluding volatile food and energy components, prices only rose 0.1%. Overall, rising inflation will be one of the hottest topics in 2021, but it's too early for the Fed to announce any tapering of asset purchases. Any signs of this may bring an end to the Dollar's decline as higher yields begin to attract Dollar inflows and make equities valuations harder to justify. This will be a topic to explore in detail later in the year. However, it will be interesting if the Fed's Chair Jerome Powell provides any hints on this topic later today on a webinar hosted by Princeton University.

#source

Related

Space tourism takes off and opens colossal market
Space tourism takes off and opens colossal market

Space tourism is definitely on the rise. According to Bank of America Merrill Lynch, it could represent USD 2.700 billion by 2045, against 400 billion today...

24 Sep 2021

All Eyes On The BOE Meeting
All Eyes On The BOE Meeting

US and European futures are trading higher today, following the Fed’s announcement yesterday that the economy is exhibiting signs of strength and...

23 Sep 2021

Stocks steady on Evergrande debt assurance
Stocks steady on Evergrande debt assurance

Equities were mostly recovering on Wednesday as market nerves were somewhat calmed after China’s troubled property giant, Evergrande, told investors it will meet

23 Sep 2021

Stock Futures Trade Sharply Lower
Stock Futures Trade Sharply Lower

Futures in the United States and in Europe are trading sharply lower as investors worry about the domino effect of Evergrande’s massive plunge on the Chinese property market..

21 Sep 2021

Oil market: the unbalanced demand and supply
Oil market: the unbalanced demand and supply

Oil prices climbed to higher grounds in the most recent daily sessions adding further to its upward momentum formed so far in September. The Oil market is running...

21 Sep 2021

US Markets lost major support, Asian Indices are melting
US Markets lost major support, Asian Indices are melting

Global markets closed last week on the back foot, and no significant positive factors emerged in Asian trading, increasing the flight to safety. The Hang Seng lost...

20 Sep 2021


Editors' Picks

OctaFX information and reviews
OctaFX
86%
HotForex information and reviews
HotForex
85%
XM information and reviews
XM
80%
FXCM information and reviews
FXCM
79%
Vantage FX information and reviews
Vantage FX
78%
Moneta Markets information and reviews
Moneta Markets
77%

© 2006-2021 Forex-Ratings.com

The usage of this website constitutes acceptance of the following legal information.
Any contracts of financial instruments offered to conclude bear high risks and may result in the full loss of the deposited funds. Prior to making transactions one should get acquainted with the risks to which they relate. All the information featured on the website (reviews, brokers' news, comments, analysis, quotes, forecasts or other information materials provided by Forex Ratings, as well as information provided by the partners), including graphical information about the forex companies, brokers and dealing desks, is intended solely for informational purposes, is not a means of advertising them, and doesn't imply direct instructions for investing. Forex Ratings shall not be liable for any loss, including unlimited loss of funds, which may arise directly or indirectly from the usage of this information. The editorial staff of the website does not bear any responsibility whatsoever for the content of the comments or reviews made by the site users about the forex companies. The entire responsibility for the contents rests with the commentators. Reprint of the materials is available only with the permission of the editorial staff.
We use cookies to improve your experience and to make your stay with us more comfortable. By using Forex-Ratings.com website you agree to the cookies policy.