US Equity markets were lower again, in relatively thin trading, due to the MLK Holiday. The negative sentiment from the previous week flowed through into what is set to be a testing week. This is inauguration week, when the new President is officially sworn into office and the new administration takes over the country. The Biden administration has promised a massive $1.9 Trillion bail-out package, which is receiving a mixed reception from markets, with many pointing to the enormous and ongoing explosion in debt. The Dollar was steady against the EUR, which traded 1.2070, while the GBP held 1.3580.
Commodity currencies did not travel well to open the week, with the AUD falling to 0.7680, while the NZD is testing 0.7100. These trade exposed currencies should have been beneficiaries of the strong economic data coming out of China and the calm reserve. Chinese GDP increased to 6.5%, while Industrial Production jumped to 7.3%, leading the world. US regulation in the dying days of the Trump administration, has restricted business with Chinese companies, including giants such as Huawei.
Markets remain extremely nervous ahead of the US inauguration scheduled for Wednesday, with a massive build up of troops in Washington DC. It could be a very volatile week and a good time to be square?