Market Express: Yellen is back! Will take 'significant action' to boost the U.S. recovery?
2021-01-19


Investing.com -- With U.S. markets closed for a holiday on Monday and neither stocks nor bonds open, the market faces a week of uncertainty, with the development of the epidemic and the inauguration of U.S. President-elect Joe Biden expected to lower overall sentiment. The dollar index held steady on Monday as risk aversion took hold, while crude oil prices also fell.
 
Note that markets will be focused on Tuesday, when the Senate Finance Committee will hold a hearing on Yellen's nomination for Treasury secretary. It is worth noting that Ms Yellen's prepared remarks highlighted inequality in the US economy and said it was time to take "significant action" to boost the recovery in an environment of low interest rates. Before the Covid-19 outbreak, the US economy was K-shaped.
 
The market is also focused on a list of priorities for Biden's first 10 days in office, with plans to make a bold move to quickly reverse some of the Trump administration's controversial decisions and respond to pressing priorities such as a new pandemic and an economic downturn.
 
[Overnight Market Review]
 
Global currencies: The dollar index was steady on Monday after hitting a January high of 90.95, with risk aversion clearly taking over, with the yen outperforming and the euro falling to a six-week low of $1.2054. The pound traded at $1.3572.
 
International oil market: the world's major countries continue to worsen the outbreak of the new crown, the market once again worried about oil demand. Brent crude for March delivery ended down 35 cents, or 0.63 percent, at $54.75 a barrel.
 
Asian stocks: The Shanghai Composite Index closed up 0.84% at 3596.22 points, on turnover of 451.7 billion yuan. The Shenzhen Component Index closed at 15, 269.27 points, up 1.58 percent, on turnover of 546.5 billion yuan. The ChiNext index closed at 3,149.20 points, up 1.92 percent, on turnover of 184 billion yuan.
 
European stocks: The Stoxx Europe 600 index.SOX600 rose 0.20 percent. Germany's DAX30 index closed up 0.44 percent. France's CAC 40 index closed up 0.10%. Britain's FTSE 100 closed down 0.22 percent.
 
U.S. stocks and bonds were closed for Monday's holiday.
 
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[Big pound -- market news]
 
The U.S. Senate will hold a hearing on Janet Yellen's nomination for Treasury secretary
 
The Senate Finance Committee will hold a hearing on Yellen's nomination for Treasury secretary on Tuesday. It is worth noting that Ms Yellen's prepared remarks highlighted inequality in the US economy and said it was time to take "significant action" to boost the recovery in an environment of low interest rates. Before the Covid-19 outbreak, the US economy was K-shaped.
 
The European Commission called for accelerated implementation of the recovery plan
 
The Eurogroup held its first video conference of 2021 on Monday. In its assessment submitted to the Eurogroup, the European Commission pointed out that the new epidemic is exacerbating macroeconomic imbalances in the eurozone countries. Eurogroup Chairman and Irish Finance Minister Donoghue said, this further demonstrates the necessity of implementing policy coordination in the Eurozone. Countries should seize the window of opportunity of the EU economic recovery plan, seek a balance between short-term investment and long-term reform, and achieve sustainable economic recovery.
 
Once in office, Biden will make a bold move to quickly reverse Trump's controversial policies
 
On Wednesday, Democrat President-elect Joe Biden will be sworn in as president of the United States. According to his schedule for the first 10 days of his presidency, Biden plans to make a lightning move once he takes office, quickly reversing some of the Trump administration's controversial decisions and responding to pressing priorities such as a new pandemic and the economic downturn. Earlier, in a memo to incoming White House advisers, Biden's chief of staff, Ron Klain, laid out a plan for Biden's first 10 days in office that would address what Klain called 'four overlapping and intensifying crises' : the pandemic, the economic downturn, racial injustice and climate change.
 
[Voice -- Investment Banking Institution Perspective]
 
The outlook for the global economy remains highly uncertain in light of the Covid-19 pandemic. The new allocation of Special Drawing Rights, the International Monetary Fund's local currency, will give countries more fiscal space to respond to the crisis and accelerate the pace of digital and green economies.
 
The Bundesbank Monthly Report: As the impact of the temporary sales tax cut and the implementation of the emissions pricing project fade, the prices of many goods and services in Germany are expected to increase year on year, and Germany is expected to achieve the first "significantly positive" increase in inflation in January in nearly half a year. In addition, the resilience shown by the economy in recent years suggests that intensified outbreak control measures after the New Year may not lead to a significant delay in economic recovery. On the other hand, a prolonged period of high infection rates could trigger a major recession if economic restrictions were prolonged or intensified.