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Wall Street got back to business as usual overnight, buying equities and selling the US Dollar as Janet Yellen, in her Treasury Secretary selection testimony, told them everything they wanted to hear. They wanted to hear more stimulus, and Ms Yellen delivered 1.9 trillion reasons on that front. As is financial markets want, however, they ignored what didn’t fit that narrative. Namely, taxes would rise on corporations and the rich, and that a rapprochement in relations with China was off the table. Ms Yellen mentioned China’s trade practices and the incoming Biden administration has signalled that the China tariffs will remain untouched. Asian equity markets seemed to have taken the China position rather more seriously. After a rocky start, Asian equities are creeping into the green this morning, but the rally has more of a circumspect pragmatic look to it. Part of that will, of course, be due to the uncertainty surrounding the US Presidential inauguration this evening. I suspect that increased security across the country will nullify that risk. China left it’s one and five-year Loan Prime Rates unchanged today as expected. At this stage, I do not see the PBOC looking to materially tighten monetary policy until […]
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