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January 21, 2021

Biden’s Inauguration! Traders focus on next stimulus!

Joe Biden Inaugurated as President

Joe Biden Inaugurated as President

The biggest headline during the trading session on Wednesday was without a doubt the inauguration of Joe Biden as President of the United States, after what has been a chaotic few weeks. As he was sworn in as president, his overriding message was one of “unity”, and he was quoted as saying “We must end this uncivil war.” This was his way of acknowledging that he is taking over the United States in a very divided fashion, but quite frankly, it is very unlikely that anything changes anytime soon.

The acrimony in the United States probably has several years to still play out, as Congress will almost certainly be deadlocked to getting anything done of any significance. Blue dog Democrats will be on the hot seat as they come from more conservative parts of the country, and therefore rampant spending may not be the order of the day, despite the fact that Wall Street looks forward towards a massive stimulus.

Alibaba founder returns to public light

Alibaba founder returns to public light

Jack Ma, Alibaba Group founder, made his first public appearance since October on Wednesday when he spoke to a group of educators via video, easing concerns that the CCP perhaps took punitive actions against him for statements he made earlier. That being said, the market reacted positively, as the shares of Alibaba gained 8.5% higher in Hong Kong, and then started to see gains in the United States as well. He had not appeared in public since October 24, after he blasted China’s regulatory system in a speech at a forum hosted in Shanghai. This led to a suspension of a 37 billion IPO for Alibaba’s financial affiliate known as “Ant Group.”

Pfizer coronavirus vaccine delayed in Europe.

Pfizer coronavirus vaccine delayed in Europe.

Pfizer has been having trouble in the European Union, facing potential legal action over its surprise move to temporarily delay vaccine shipments to the European Union. The Italians are one of many countries looking to potentially take legal action against Pfizer as they have failed to deliver the vaccine. This, of course, has people in the European Union worried about the rollout of the vaccine, perhaps causing more economic damage as lockdowns will be the first thing officials do. This is a story that is still playing itself out, but clearly has a massive influence on where the EU economy goes next.

Canadian inflation stronger than anticipated

Canadian inflation stronger than anticipated

The Canadians released inflation figures during the trading session on Wednesday, with CPI year-over-year inflation coming in at 0.7%, and Bank of Canada Core year of year inflation coming at 1.5%. This was followed by a statement from the Bank of Canada suggesting that inflationary pressures will continue to hamper the economy, perhaps a slightly more hawkish tone than was anticipated. The Canadian dollar was one of the big gainers for the trading session.

Global Equity Markets

Global Equity Markets

Equities were positive in general during the trading session on Wednesday as Joe Biden becomes the 46th US president. The FTSE 100 was up 1/3 of a per cent, while the DAX was up ¾ of a per cent. France was not left behind either, as it gained ½ of a per cent. The lone loser was the Nikkei 225, dropping 38 basis points, but it midday in the United States the S&P 500 was up roughly 1%.

Index Change
FTSE100

FTSE100

0.33

DAX

DAX

0.75

CAC40

CAC40

0.51

Nikkei 225

Nikkei 225

-0.38

S&P 500

S&P 500

0.99

Currencies

Currencies

Currency markets were a little less clear as to risk appetite, as the Euro lost a bit of strength against the greenback, dropping another quarter of a per cent. The British pound lost four basis points, while the Japanese yen gained 1/3 of a per cent, and the Australian dollar gained two-thirds of a per cent. In general, this shows a real lack of vision by FX traders over the last couple of days.

Index Change
EUR/USD

EUR/USD

-0.2655

GBP/USD

GBP/USD

-0.0401

USD/JPY

USD/JPY

-0.2936

AUD/USD

AUD/USD

0.6227

Commodities

Commodities

Commodity traders were very bullish on everything that we follow, betting on the reflation trade that will be coming out of the Biden Administration. Gold markets gained 1.36%, while silver was up over 1 ½%. Brent markets were slightly positive, but it is worth noting that they pulled back significantly from the highs. Platinum was up over 2%, and copper was just slightly positive for the day, albeit at very high levels.

Index Change
Gold

Gold

1.36

Silver

Silver

1.58

Brent

Brent

0.63

Platinum

Platinum

2.16

Copper

Copper

0.14

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