iden, who will be sworn in as the 46th president of the United States next week, unveiled plans for a massive stimulus package equivalent to $1.9 trillion in order to fight the downside impact of the COVID-19 pandemic. $1 trillion will set aside for households, including direct handouts $1,400 to all Americans, with $440bn for businesses and $415bn to combat the virus itself. He has also pledged to extend the recently announced additional unemployment benefits through to September, and increase the programme’s monthly payments from $300 to $400. The big challenge for Biden will now, of course, be forcing the package through Congress. He is likely to face stern opposition from Republicans, although now that the Democrats control both chambers we would expect it to be narrowly passed.

The announcement of a large US stimulus programme is good news for risk assets, and a negative for the safe-haven dollar, albeit with much of the details already announced in the media it was comments from Fed chair Powell that proved the biggest market mover yesterday. Powell noted that the US was still a long way off reaching the central bank’s goals of full employment and 2% inflation, and that it was far too early to think about winding down the pace of asset purchases. There had been speculation that purchases could be wound down later this year, although Powell comments suggest that this is unlikely to be the case.

Sterling traders encouraged by UK’s rapid vaccine progress

Investors continue to turn a blind eye to the recent worrisome COVID data out of the UK, instead focusing on the positives, namely the rapid progress being made towards mass vaccinations. As of data from Wednesday, the UK had administered at least one of either the Pfizer or AstraZeneca jab to approximately 5% of the population. The UK is currently leading the vaccination race among developed nations, with the likes of the US (3.4%), Italy (1.6%) and Spain (1.5%) still some way behind (Figure 1).

Figure 1: COVID-19 Vaccinations Administered (per 100 people)