The dollar index slid 0.25% lower yesterday as the 45th President exited the White House.
Investors now look ahead to financial spending worth trillions of dollars. Joe Biden already unveiled a $1.9 trillion stimulus package that he hopes will get congressional approval.
Biden’s policies have received support from the new treasury secretary Janet Yellen. In a written statement yesterday, Yellen said that the country needed to act big to prevent a deep recession.
We now look ahead to the next four years of this new regime.
Euro Rises on Strong Economic Data
The euro closed 0.45% higher on Tuesday as it once again punched through the 1.21 ceiling.
Germany’s ZEW economic sentiment improved in January, marking a 4-month high. The report found that there is optimism over economic conditions, with expectations that inflation and exports will move higher for Europe’s biggest economy.
We now look ahead to today’s CPI data for another move back to recent highs for the currency pair.
Pandemic Not Going Anywhere
Sterling closed 0.28% higher yesterday, rising through the 1.36 handle.
This comes despite the UK recording its worst-ever daily Covid-19 fatality rate. It means the total number of deaths by that measure is now above 90,000.
The focus now shifts to today’s PPI numbers, as well as the UK’s inflation data, which could provide a clearer near-term direction.
Strong Bank Earnings Propels Indexes
Big banks like Goldman Sachs, JP Morgan, Bank of America, and Citigroup all released impressive results as the earnings season commences.
That has continued to supercharge the Dow Jones and the S&P 500 as they closed higher 0.32% and 0.65% respectively.
Netflix also released their Q4 earnings, blowing away estimates as they added 8.5 million users.
Gold Flatlined Ahead of Biden’s Entry
The yellow metal was fairly mixed on Tuesday, as investors digested an expected testimony from US Treasury Secretary nominee Yellen.
Traders now look ahead to US President-elect Joe Biden’s inauguration to the Presidency, which will be eyed for more information as to his plans and agenda.
Markets will also be on the lookout for any further political violence, as security is stepped up around the country to guard against Trump supporters.
Oil Teases the $53 Handle
WTI moved almost 2% higher on Tuesday, as it flirted at the $53 level.
This comes despite the monthly IEA report being downbeat. The agency downgraded its forecast for Q1 oil demand growth by 600K bpd, a reflection of resurgent Covid-19 cases and associated lockdowns in major economies.
However, this failed to deliver any meaningful dent to the bullish oil market sentiment, as the black gold searches for fresh highs once again.