Good morning and welcome to our continued coverage of the global economy, financial markets, the eurozone and business.
Wall Street closed higher last night and European equity markets are expected to rise this morning as calm was restored on Capitol Hill. The Dow Jones closed the day 1.44% higher while the FTSE 100 indexes had a stellar streak and closed 3.47% higher, the highest level since late February.
Other European stock markets also rebounded amid optimism about the mass vaccination and the prospect of Democrats taking control of the US Senate. Asian markets were mostly higher, with the Nikkei gaining 1.6% and the Australian stock market 1.44%.
However, there were shocking scenes in Washington DC last night when, following a demonstration led by Donald Trump, hundreds of his supporters marched to the Capitol and stormed the building. The Capitol was closed as Trump supporters were seen smashing windows, walking through the building, waving flags and violently clashing with police. Employees hid in their offices, senators were evacuated, and the DC mayor ordered a 12-hour curfew starting at 6 p.m. A woman was shot by the police and later died of her injuries.
The attack on the Capitol forced the Senate and House of Representatives to halt their debate on congressional certification of Joe Biden’s electoral victory over Trump in the November presidential election, which is usually a ceremonial matter. Since then, the process has resumed.
Biden, who was due to give a speech on the economy, addressed the nation as chaos unfolded on Capitol Hill. “The attack on the Capitol is not a protest, it is an insurrection,” he said.
In a video message, Trump later told his supporters to go home, but also told them, “We love you, you are very special,” and repeated false claims that the election had been stolen. The president, who has yet to admit he lost the election, has spent the past few weeks trying to pressure public officials to overturn Biden’s 306-232 election victory.
On the same day, Democrats won two crucial victories over sitting Republican senators in Georgia’s runoff elections., which means they have taken control of the Senate. Raphael Warnock, the senior pastor of Ebenezer Baptist Church in Atlanta, where Martin Luther King once preached, won his race over Kelly Loeffler. In the second race, Jon Scoff narrowly beat David Perdue, his Republican opponent.
The minutes of the last meeting of the US Federal Reserve on December 16 were also released last night. They revealed that Fed officials were in no rush to change the monthly pace or composition of large-scale asset purchases.
Officials acknowledged that “the recovery so far has been stronger than anticipated” … “but saw the most recent indicators as a sign that the pace of recovery had slowed.” On the positive side, however, “the positive vaccine news received during the intersession period was viewed as favorable for the medium-term economic outlook.”
Paul Ashworth, chief US economist at Capital Economics, said:
High-frequency data has deteriorated since that mid-December meeting. But Congress also agreed to a $900 billion stimulus, which could be expanded now that Democrats appear to have narrowly gained control of the Senate as well. That additional fiscal stimulus will ease the pressure to provide more monetary accommodation.
- 9:00 a.m. M. GMT: Economic Bulletin of the European Central Bank
- 9:30 am GMT: UK Construction PMI
- 10 a. M. GMT: Eurozone inflation for December (forecast: -0.2%)
- 10 a. M. GMT: Euro Zone Consumer Confidence for December
- 1:30 pm GMT: US Trade for November
- 1:30 pm GMT: Initial US Unemployment Claims for the week of January 2 (forecast: 800,000)
- 15:00 GMT: US ISM Non-Manufacturing Business Activity Index for December (forecast: 55)
George is Digismak’s reported cum editor with 13 years of experience in Journalism