US President-elect Joseph Biden announced a new $1.9 trillion economic support package on Thursday. This package provides an increase in one-time payments to Americans up to $2,000, an increase in additional unemployment benefits from $300 to $400, the allocation of 440 billion for small businesses and local budgets and 415 billion to fight the pandemic and the rollout of the vaccine.
US stock market indices spent most of the past week in the consolidation phase. On Friday closed in the negative territory, which could be caused by profit-taking before the long weekend – on Monday, the stock market is closed due to Martin Luther King Day. The principle “buy on rumours, sell on facts” worked as well. Market participants expected new economic support measures, the adoption of which became possible after the victory of the Democratic candidates in the elections in Georgia, which ensured the control of the Democrats over the Senate.
The dollar index has been in the phase of an upward correction facilitated by the growing demand for safe-haven assets against the backdrop of weak US macroeconomic statistics and a worsening epidemiological situation in Europe.
The euro fell to a monthly minimum. The weakening of the single currency was facilitated by the dollar’s strengthening, political uncertainty in Italy and tougher lockdown restrictions in Europe. France tightened border controls and extended curfews. The possibility of tightening lockdown restrictions is being considered in Germany. The leader of the Italian party Viva Matteo Renzi announced his withdrawal from the ruling coalition. If a new coalition is not formed, the Italian government led by Giuseppe Conte will be forced to resign.
Main events of the current week
On Tuesday, German economic sentiment index will be published. Goldman Sachs will present its quarterly report before market open. Netflix will report earnings after the market close.
On Wednesday, data on consumer price indices in the UK, eurozone and Canada, and data on crude oil inventories will be presented. The People’s Bank of China will decide on the interest rate. There will also be a meeting of the Bank of Canada and the inauguration of Joseph Biden.
On Thursday, data on employment change in Australia, US building permits and jobless claims and the consumer price index in New Zealand will be published. The Bank of Japan and the ECB will hold monetary policy meetings. Intel, IBM and Intuitive Surgical will publish quarterly reports after market close.
On Friday, data on retail sales in Australia, the UK and Canada, PMIs of Germany and the UK, and the US existing home sales will be presented.
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