Stocks are loving the Blue Wave

07/01/2021

Wednesday saw some massive gains across the equity markets (tech underperformed), while the USD slipped and precious metals cratered. 

The Democratic candidates of Jon Ossoff and Raphael Warnock have won the two Senate seats in Georgia. 

Democrats will now have control of the White House, the Senate and the House of Representatives. That is a perfect combo for the new president Joe Biden and his policies. Biden will most likely start raising taxes soon, but the new fiscal stimulus is expected to be much bigger than what would Republicans have done. 

Therefore, stock markets rallied yesterday amid expectations of more stimulus, while precious metals were hammered amid the same expectations. Very nice. 

Later in the day, the EU CPI is due and the yearly change is expected at -0.2%, while the core inflation is seen staying at 0.2%.

During the US session, jobless claims will be released, along with the ISM services PMI. Services are expected to take another hit as more lockdowns are reintroduced. 

The greenback still remains under pressure and the dollar index broke below the 2018 lows yesterday, pointing to further downside for the US dollar. 
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