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US Senate overrides Trump’s Defence Bill veto and signs of COVID-19 slowdown in Europe

Weekly Market Update 1 Jan 2021 – US Senate overrides Trump’s Defence Bill veto and signs of slower COVID-19 spread in Europe

1. US President Trump has finally agreed to sign the stimulus bill after threatening refusal to sign it after a hard-won agreement from Congress. He subsequently decided to veto the defence bill, criticizing it for measures including renaming military bases, regulating troop withdrawals and lack of changes to online content laws. However, the Senate voted to override his veto, including many Republicans

2. Euro benefited from the Brexit deal by averting a disruption in economic activity. In addition, EU also won a concession from UK, securing uninterrupted access for its boats for the next 5.5 years. On the coronavirus front, the strict lockdown measures in Italy, Spain, France, and Netherlands has slowed the virus curve and is seeing positive signs of the curve flattening

3. Headline risk is greatly minimized with both Brexit and US stimulus bill successfully completed. Despite the conclusion of Brexit talks, Sterling declined, likely due to investors’ Brexit exhaustion after years of uncertainty

Salzworth Asset Management