Democrats Take Control After Deadly Capitol Hill Riots
DXY Hits Multi-Year Lows
The US Index was virtually unchanged yesterday after initially dropping to multi-year lows during the trading session.
Yesterday, the Democratic Party officially won control of the Senate, and of Congress overall with two victories in Georgia. This led to deadly protests and Trump supporters storming and ransacking Capitol Hill.
The victory will mean fewer hurdles for the Biden regime to increase coronavirus stimulus, which could weigh heavily on the greenback.
Meanwhile, the Trump regime are still citing unfounded claims of fraud. VP Pence continues to oversee the electoral counting for any discrepancies before reading out the final presidential result as approved by Congress.
With 2 weeks remaining until Biden’s inauguration, will any other drama unfold?
European Commission Authorises Another Vaccine
The euro closed 0.23% higher on Wednesday as it pushed through 1.23 once again.
This came despite business activity in the eurozone contracting more than initially estimated for December, as the pandemic takes its toll.
However, the EC authorized the Moderna covid vaccine for use in the EU yesterday, following a green light from the EMA.
Europe has secured up to two billion doses, which buoyed sentiment as infection numbers are intensifying over the bloc.
Sterling Hit as Covid-19 Ravages Britain
The pound ended 0.13% lower after initially dropping through the 1.36 barrier yesterday.
With the UK officially cutting ties with the EU, attentions now turn directly to the burden of the pandemic.
Hospitalizations have recently topped the peak of the first wave, whilst vaccination rollouts occur at a slower pace than expected.
One has to wonder when the realistic lifting of restrictions will happen, as daily infection rates increase.
Indices Shrug Off Demonstrations
Investors showed little reaction to the mob that stormed Congress yesterday, as the Dow closed to another record high on Wednesday.
The invasion of the Capitol did nothing to change expectations around the near-term political and economic outlook.
The optimism and prospect of further government funding led stocks to rally. This is because a united Democratic government could lead to more fiscal aid and infrastructure spending.
Investors Turn Risk-On as Gold Sinks
Gold fell by 1.6% on Wednesday. This was the most in almost 2 months after touching the $1900 handle during the session.
The yellow metal took a U-turn from November highs to post the biggest losses since early December, as US geopolitics headlines hit sentiment.
We now look for a retracement for gold, which has seen a steady increase in fortunes since December.
Oil Pushes Higher
WTI moved 1.38% higher yesterday after the EIA reported a crude draw for last week.
This comes as the API released modest data for inventories as the black gold firmly placed its grip on $50.
Meanwhile, Saudi Arabia pledged to cut an additional 1 million bpd of oil production. In addition, OPEC producers agreed to minimal output increases for February and March.