Morning Report – Thursday 14th January

Main Headlines

Donald Trump has become the first US President ever to be impeached for a second time, charged with “incitement to insurrection” for his role in the Capitol Hill attack last week. The House voted 232-197 in favour of impeachment with 10 Republicans breaking ranks to join the Democrats.

Michel Barnier has said that post-Brexit border friction will be the ‘new normal’, as some disruptions will be impossible to smooth over as part of the consequences of Brexit. Over the next few months, it is likely we will see many British businesses stopping exports to the Eurozone.

GBP

The pound is bid against both the dollar and euro in trading this morning. According to a survey of 20,000 UK healthcare workers, people who have already been infected by Covid-19 are as protected from the virus as the vaccination. The U.K. continues to outpace it’s European counterparts in Coronavirus vaccinations.

EUR

The euro is mostly unchanged against the dollar in early morning trading today. The ECB’s massive pandemic aid to the finance industry has led to smaller profits and according to Economist Richard Barwell, the aid is acting more like fiscal rather than monetary policy. ECB’s December meeting’s minutes released today should shed more light on how the ECB view their new policy.

USD

The dollar is slightly higher against a set of major currencies including the Japanese Yen. Joe Biden’s fiscal stimulus package will reportedly cost around $2 trillion including direct payments to American citizens. US initial jobless claims are also released today and policymakers will hope that jobless claims fall for the fourth consecutive week, although they will likely be very high around the 800,000 mark.

Markets

Global equities and Treasury yields are higher after reports suggest that Joe Biden is planning to introduce a hefty fiscal stimulus package, which should be announced later today. Yields are at their highest level since March while Oil prices also edged higher.

Main Economic Data/Central Banks/Government (All times GMT)

7:00 a.m.: Turkey Dec. Home Sales
9:00 a.m.: Germany 2020 GDP NSA
11:00 a.m.: Italy sells bonds
12:30 p.m.: ECB Dec. Minutes
1:30 p.m.: U.S. Initial Jobless Claims
4:00 p.m.: ECB’s de Cos speaks
OPEC Oil Market Report

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