Home Markets Joe Biden Sworn in as 46th President, Markets Risk Appetite

Joe Biden Sworn in as 46th President, Markets Risk Appetite

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Joe Biden Sworn in as 46th President, Markets Risk Appetite

Joe Biden is sworn in today as the 46th President, so markets had been on edge amid increased security after the uprising on Capitol Hill.

Only about 1,000 socially estranged guests attended, including former presidents Barack Obama, George W. Bush y Bill Clinton.

To little surprise Donald Trump was not present, making him the first president to skip the inauguration of a successor since Andrew Johnson.

The speech of Joe Biden focused on the same themes of unity and bipartisanship that were a feature of his election campaign, but it remains to be seen how his ambitious spending plans will survive the reality of a tightly divided Congress.

Market implications

This is where the US dollar comes into question. The biggest factors in how the dollar fares under Biden will likely be his fiscal policy..

Even if you get just half the fiscal stimulus you’re asking for, it would turn out to be another significant headwind for what is already likely to be a rapid economic recovery this year.

How the Fed will respond will also matter. But Biden’s plans appear to have helped the dollar stabilize over the past two weeks.

However, there was a restructuring of positions, especially vis-à-vis currencies linked to commodity prices, just before his inauguration, as the feeling of appetite for risk soared.

He S&P 500 has risen at market open, and continues to rise throughout the day’s event, with Wall Street reaching new all-time highs.

He USD / CAD fell from 1.2698 to a low of 1.2606 and the AUD/USD it shot up from 0.7728 to a high of 0.7760.

Risk sentiment will lead the way for the foreseeable future and will likely be determined by the spread of covid and the pace of vaccine release.

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