Morning Report – Thursday 21st January

Main Headlines

Joe Biden was sworn in as the 46th President of the United States in Washington DC yesterday. In his speech, Biden hailed the success of democracy and called on Americans to come together to tackle the ongoing Coronavirus pandemic and economic downturn.

England’s current lockdown has failed to suppress the rise in Covid-19 transmissions according to an Imperial College study. The study found that the prevalence of the virus was very high with no signs of decline and we were also seeing a slowly increasing R number.

GBP

The pound is higher against the dollar and is at an 8-month high against the euro in trading this morning. The UK economy is dealing with the third lockdown much better than in the two previous instances according to Governor Andrew Bailey. Bailey also reiterated whether it would be worthwhile to implement negative interest rates, despite what some analysts would describe as limited effectiveness (to put it mildly) in the EU.

EUR

The euro is slightly higher against the dollar in early morning trading today. The ECB rate decision is today, but it is unlikely that Christine Lagarde will take any further action in the form of a rate move or a change in the bond buying programme. Instead Lagarde will focus on the economic outlook of the Eurozone economy and give updates on new downside risks seen since the last meeting in December.

USD

The dollar is lower against a set of major currencies but is mostly unchanged against the Japanese Yen in trading this morning. Joe Biden signed a total of 17 executive actions on his first day of President, as he tried to project a return to normality. The most important one being the move to bring the US back into the Paris Climate Accord.

Markets

Global equities climbed to another record high amid optimism over Joe Biden’s inauguration. S&P 500 futures posted the largest gain on an Inauguration Day since 1937 on expectations that increased fiscal spending will revive economic growth, but also relief that there were no last minute “Hail Marys” from Donald Trump to ruin the day.

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

7:00 a.m.: Turkey Jan. Consumer Confidence
7:45 a.m.: France Jan. Manufacturing Confidence
9:00 a.m.: Italy Nov. Industrial Orders
9:00 a.m.: Norway Rate Decision
11:00 a.m.: Turkey Rate Decision
12:00 p.m.: Ukraine Rate Decision
12:45 p.m.: ECB Rate Decision
1:30 p.m.: ECB’s Lagarde speaks
1:30 p.m.: U.S. Initial Jobless Claims
3:00 p.m.: Euro-Area Jan. Consumer Confidence
4:00 p.m.: EIA oil inventory report

South Africa Rate Decision

Corporate Events
Earnings include Intel, IBM, Investor AB, Sandvik, Baker Hughes