Archives of “January 15, 2021” day

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Biden’s $1.9tln stimulus unlikely to support the US dollar

  
  Analysis

Analysts at Credit Agricole in Hong Kong in a response to Biden’s plans announced earlier.

  • stimulus package underwhelmed the market
  • provided a little support for the USD and yen
  • But longer term, “the package does not likely encourage further Treasury yield rises and a stronger dollar”
  • package will struggle to get past the filibuster and could end up smaller than the proposed $1.9 trillion
CA also weave in Powell’s comments Thursday (US time):
  • “Powell continues to exercise flexibility around the Fed’s inflation overshoot commitment in terms of not committing to any formulas. He also cooled talk about taper”

Poll shows Bank of England still expected to keep rates unchanged until at least 2024

  
  Analysis

Reuters latest poll of analysts on the outlook for the UK.

Analysts expect:
  • It will take more than two years for Britain’s economy to recover to its pre-COVID-19 level
  • Bank of England was still expected to keep rates steady until at least 2024 and to avoid negative borrowing costs
  • economy would contract 1.4% this quarter
  • next quarter the economy was expected to expand 3.9%
  • grow 2.5% in Q2
Reuters have posted more at this link.

ANZ see gold a little higher this year – forecasts

  
  Analysis

Comments from ANZ on what they expect for gold:

  • Gold’s upside looks constrained amid rising yield and buoyant risky assets. However, a weaker US dollar, stimulus expectations and depressed real interest rates should remain supportive. Talks around tapering asset purchases will be the key headwind developing later this year.
Forecasts for 2021:
  • March $1950
  • June $2100
  • September $2000
  • December $1900

Major indices close lower after giving up earlier gains

  
Analysis, US Market

Dow first 2 day losing streak since December 10

The major indices are all closing lower with the S&P index losing the most ground on the day. In contrast the small-cap Russell 2000 is closing at a record. The Dow closed lower for the 2nd consecutive day. This was the 1st 2 day losing streak since December 10.

The final numbers are showing:
  • S&P index -14.3 points or -0.3% at 3795.54. The high price reached 3823.60. The index closes just off it’s session lows at 3792.86
  • Nasdaq fell -16.314 points or -0.12% at 13112.63. The high reached 13220.15. The low was down at 13098.41
  • The Dow fell -68.95 points or -0.22% at 30991.52. The high reached 31223.78. The low extended to 30982.24.
  • The Russell 2000 index close up 2.12%
In the European equity markets today, the major indices close higher with the exception of the Italian FTSE MIB.  The UK FTSE 100 led the way with a 0.84% gain.
Below are the percentage changes and ranges for the major indices in Europe and North American today.
The percentage changes of the major indices

Biden expected to outline $1.9 trillion plan – report

  
  Analysis

New York Times report

Biden
We’ve got the number. That’s a big one but it’s not ‘trillionS‘ though he might promise more to come later.
The report cites two people familiar with the plan and says it will cover the pandemic, the economy, health care, education, climate change and other domestic priorities.
The New York Times earlier outlined some of the expected details earlier and they’re confirmed with the latest report:
  • Plan will include $2000 direct payments
  • Includes more vaccines and virus testing
  • Will include aid for state and local governments
  • An extension of supplemental federal unemployment benefits
  • More help for renters
  • Money for schools to open
There was talk of $1.3 trillion yesterday and of Schumer urging Biden to do more. This is only the first part of a two-part plan but markets might be taking it as the final price tag.

The second bill will include more infrastructure and longer-term initiatives and structural reforms; perhaps with a tax increase for higher earners.

It’s not clear which part might include Biden priorities like a $15/hour minimum wage.
Some market disappointment may be clarity on the $2000 payments.
As part of a $1.9 trillion covid package, Biden’s $2,000 stimulus checks will “come in the form of additional $1,400 stimulus checks, topping up the $600 checks that Congress approved in December,” the report says.
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