Reports that Biden’s is set to announce a $2 trillion package have been boosting markets and 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. EUR/USD has been retreating in response to reports of a $2 trillion stimulus while USD/JPY remains locked in a narrow range of 103.95 to 104.10. GBP/USD remains buoyed by Britain’s accelerated vaccination campaign and by hawkish words from the Bank of England early in the week.
Gold has dropped sharply in response to rising yields, falling to new weekly lows at $1,827, however was able to recover some of the loses. Oil is trading largely unchanged on the day, having faced rejection near $54.00 on Wednesday.
The European Central Bank releases its meeting minutes on Thursday, and it may repeat President Christine Lagarde’s message that uncertainty has receded. 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.