Markets “Sell Fact” of Biden Stimulus, Dollar Rises, Retail Sales in Focus

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This is what you need to know to trade today Friday, January 15:

Markets are on the defensive after Biden hinted at tax increases by introducing stimulus. The safe haven dollar is on the rise despite Powell’s promise of accommodative monetary policy. US retail sales, consumer confidence and other figures compete with coronavirus figures in its impact on markets.

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Fiscal stimulus: President-elect Joe Biden presented a $ 1.9 trillion aid package as expected. The scope of the plan, the first of a two-pronged approach, was already included in the market prices. Also, the incoming Commander-in-Chief spoke of people “paying their fair share” and investors are concerned about rate hikes. It is also unclear how much of the plan can be passed, as Democrats have a slim majority in Congress.

Monetary stimulus: Jerome Powell, president of the Federal Reserve, clarified that the rate hikes will not occur in the short term, nor will the reduction of bond purchases. US Treasury yields are down, weighing on the dollar until market sentiment has soured.

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Gold has held on to $ 1,850, climbing slowly amid prospects for more fiscal and monetary stimulus.

US data: LWeekly Unemployment Claims Disappointed Significantly with a jump to 965,000, the highest since the summer, and due to the impact of the coronavirus, which continues to sweep in the US The focus now shifts to the consumer. December retail sales figures are forecast to remain virtually unchanged after falling in November.

See US Retail Sales Forecast for August: Surprising Facts About Retail Sales

UK: Britain is set to further accelerate its vaccination campaign next week. Prime Minister Boris Johnson is under pressure from a group of deputies who demand to loosen the blockade. Recent measures are beginning to bear fruit and cases are decreasing.

Virus strains: Britain has banned travel from South America and Portugal amid concerns about a new Brazilian variant. Scientists are unsure whether current immunizations are effective against this new strain, which has devastated the Amazonian city of Manaus.

See Coronavirus: Statistics, herd immunity, vaccination schedule and impact on financial and currency markets

Europe: France has announced an early evening curfew to improve social distancing and slow the spread of the virus. German Chancellor Angela Merkel is considering tightening restrictions as cases and deaths remain high. Spanish regions are also imposing new limits in the wake of a post-holiday wave.

Merkel’s CDU party to elect a new leader over the weekend, with the moderate Armin Laschet competing with the more populist Friedrich Merz. Another candidate is Norbert Röttgen, which could be a compromise. The country’s general elections will be held only in September.

Cryptocurrencies: Bitcoin has been retreating from $ 40,000, suffering declines after advancing on Thursday.

Five factors that will move the US dollar in 2021 and not necessarily lower

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