Weekly Market Update 22 Jan 2021 – Inauguration of Joe Biden as president, ECB and BOJ leave monetary policy unchanged
Weekly Market Update 22 Jan 2021 – Inauguration of Joe Biden as president, ECB and BOJ leave policies unchanged
1. Markets were exuberant with the inauguration of Joe Biden as the 46th president of the United States which promises a return to stability in policymaking. During his first day at office, the new president has already taken a range of executive actions, including implementing a national mask mandate on federal property, reversing a travel ban from several largely Muslim and Africa countries, and seeking to rejoin the Paris climate accord and WHO. The USD rallied against all of the major currencies to end off the week.
2. Stocks hit record highs as the inauguration coincided with upbeat earnings, with technology companies pushing major stock indices to fresh records on the back of better than estimated results and expectations of further profit growth this year.
3. The ECB meeting this week left monetary policy unchanged and hinted that there may not be a need for as much quantitative easing over time. The slightly less dovish outlook coupled with strong manufacturing activity from the Eurozone led gains in Euro.
4. Over in Japan, the BOJ has also left monetary policy unchanged but downgraded their economic assessment, reducing 2020 GDP forecasts slightly while raising the 2021 GDP forecast on the optimism that the economy will continue to pick up.