Poor US data, slow vaccine distribution, rising virus cases worsened the market sentiment and underpinned safe-haven currencies like the USD, and JPY.
China funds spur equity allocations
For the next three months Chinese fund managers increased their suggested equity exposure because key indexes pierced major resistance, while market sentiment gained on further indications of an expanding Chinese economy, as a monthly Reuters survey revealed.
The recent market soar was spurred by sturdy corporate earnings, which have increased hopes that economic momentum are going to remain firm enough through the rest of 2017, thus defying analysts' hopes for a gradual slowdown.
Market sentiment was also backed by indications that Beijing is actually stepping up efforts to restructure China’s lumbering and usually inefficient state-owned enterprises by simply giving the green light to more public as well as private investment in the long-protected sector.
The fund managers increased their suggested equity allocations to about 76.9%, from the previous month’s outcome of 75%, according to a survey of eight China-based fund managers for this week.
The European Central Bank will publish the monetary policy statement with the interest rate decision on January 21, at 14:45 MT time.
Joe Biden is going to unveil a Covid-19 relief package of about $2 trillion. After this announcement, the 10-year Treasury yield rose, adding support for the USD.
The Canadian central bank will make a monetary policy report and announce interest rates on Wednesday, January 20, at 17:00 MT time. Also, the BOC press conference will be held later.
USD’s rally takes a pause, while riskier assets are modestly rising.
We are now past the middle of January, and this means that the largest US companies will report their earnings for the fourth quarter and many of them will provide the results of the entire 2020.