Joe Biden was inaugurated overnight as the President of the USA. US markets were relieved and surged towards record territory, eliminating recent losses. The US Dollar was steady, with the prospects of massive fiscal stimulus and a new Federal Reserve Chair. The Biden administration has promised a bombardment of Executive Orders, undoing many of Trumps actions and reverting back to the Obama/Biden administrations policies. The Democrats have control over both the House and the Senate, give them carte blanche. The promise of unheralded spending will spook fiscal conservatives, but incoming Fed Chair Yellen, has encouraged the Government to ‘act big’, in the historically low interest rate environment.
The Chinese will be relieved, as they will be able to break from the tumultuous relationship with President Trump, which has allowed commodity currencies to book gains. The NZD jumped to 0.7150, while the AUD has traded up to 0.7730, despite a slump in consumer confidence. We are in a new era, which may be an advancement of the previous Obama administration, with many of his administration personnel returning to key positions of power.
Markets will watch closely and it will be interesting to see when the fiscal largesse reaches some sort of crises point?