Spreadex Market Update

FTSE struggles for agency on quietest session of 2021, preceding week that is anything but



In a sign, if one was needed, that Europe is often lost without American direction, the markets essentially took MLK Day off this Monday.

Lacking a US intervention, broadly unimpressed with China’s Q4 GDP rebound due to a drop in retail sales, and anxious about how Wednesday’s inauguration is going to play out across the States, the European indices dozed through the session.

With Brent Crude the wrong side of $55 per barrel, leaving BP and Shell in the red, the FTSE lost 0.2%, nudging it closer to 6,700.

The Eurozone indices spent the day on the other end of the meagre movement spectrum. The DAX re-crossed 13,800 with a 0.3% increase, while the CAC clung on above 5,600 after climbing 0.2%.

And that’s about it. One of the quietest sessions since the year began. However, while tomorrow doesn’t look to exciting, it could well be a week to remember.

Of course the star of the show is Wednesday’s inauguration, which sadly is now being viewed as the match to light the tinderbox that is the domestic landscape in America, rather than the end to one of uglier periods in the country’s political history.

Soon as Wednesday’s over, attention is going to be firmly on the Democrats’ ability to get things done – and by things, investors meant the $1.9 trillion covid-19 stimulus package announced by Joe Biden last week. It’s the first test of the new administration’s willingness to muscle policy through a precariously balanced, if blue-tinged, Senate, and could come to set the tone for how investors view any future challenges Biden may face.

On top of that there’s a webinar appearance from Andrew Bailey on Wednesday, which always has the ability to move the UK markets, followed by the first ECB meeting of 2021 a day later. Thursday also has an increasingly alarming US jobless claims reading – in danger of hitting 1 million if it once again overshoots estimates – with Friday then peeling back the curtain on January’s creaky economic performance with the latest flash PMIs.

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