Calm Tuesday, so far


Equity markets were consolidating on Tuesday and were trying to correct some of their yesterday's losses as steep selling hit the markets during the US session.

Investors are currently struggling with the uncertainty surrounding the Senate runoffs in Georgia due later Tuesday. These could determine the control of this branch of the US government and thus impact the economic policies incoming President Joe Biden will be able to introduce.

Additionally, more lockdowns and restrictions are incoming as the worldwide coronavirus cases continue to rise steeply. That seems bullish for indices as more money printing needs to follow, although many cyclical businesses will cease to exist. 

Later in the day, the US manufacturing ISM for December is expected to decline slightly to 56.6 from 57.5 previously. However, the employment subindex is seen rising to 50.7 from 48.4 in November. 

In the FX, the USD is sold-off again, with the EURUSD pair trying to break above the 1.23 level, while the USDJPY pair dropped to new cycle lows below 103.00. Real yields are also falling, which is pushing inflation expectations to new cycle highs. 
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