Trump signs da ting, stocks head higher - start of the Santa rally?

Australia, Canada, New Zealand & U.K. exchanges are closed today.

Most global indices are well in the green, and the dollar (DXY) is hovering just above 90.

U.S. Futures are up, treasury yields are slightly higher, oil is missing the party.

Trump averts government shutdown by signing Covid relief bill

Donald Trump signed a bill to release $900bn in coronavirus stimulus spending on Sunday night after previously blocking a deal he had described as a “disgrace”.
Mr Trump’s decision to approve the $2.3tn bill will fund the US government through the end of next September and avoid a shutdown that was set to start after midnight on Monday.
However, in an accompanying statement, Mr Trump reiterated his demand that Congress increase the direct payment cheques sent to Americans from $600 to $2,000 per individual.
Mr Trump claimed the Republican-controlled Senate would “start the process for a vote that increases checks to $2,000”, repeal Section 230 of the Communications Decency Act and start “an investigation into voter fraud”, as would the Democrat-controlled House. Section 230 grants social media companies immunity over libellous content, and has long been a target for the president.
Mr Trump maintains, without evidence, that he lost November’s presidential election because of vote fraud. Mr Trump said that he would return the signed legislation to Congress with a “formal rescission request” for certain “wasteful” line items to be removed despite the fact it has now been put into law.
The nearly 5,600-page stimulus bill Congress passed last week will allow Americans to claim jobless assistance for 50 weeks and provides a supplemental $300 a week in benefits to workers who had lost their jobs.
It also provides billions of dollars in funds for struggling industries such as airlines and to help tenants who have fallen behind on rent payments. Congress is set to return to Washington early this week.
The Democratic-controlled House is set to vote to increase the stimulus cheques from $600 to $2,000 on Monday, as Democrats have sought and Mr Trump is now requesting. Despite the president’s most recent statement, it is unclear how the Republican-controlled Senate will respond to Mr Trump’s demands.

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Japan Nov factory output growth stalls after rising for 5 months

Japan’s industrial output growth stalled in November after rising for five months, underscoring the fragile nature of the global economic recovery due to a recent resurgence in COVID-19 infections.
Official data released on Monday showed factory output was flat in November from the previous month, as declining output of cars and plastic products offset strength in production and general machinery output.
The flat reading was much slower than the prior month’s final 4.0% gain, and below the median market forecast of a 1.2% rise in a Reuters poll of economists.
“The recovery pace is slowing a little more than expected,” said Takumi Tsunoda, senior economist at Shinkin Central Bank Research Institute.
Factory output has been recovering from a pandemic-induced downturn earlier this year, helped particularly by solid global demand for cars. Car output in November suffered from falling shipments to the United States and Australia, a government official said.
Some analysts worry that new virus infections around the world, especially in Europe and the United States, may prevent demand for Japan’s manufactured goods to grow further as corporate and consumer activity take a hit.
Separate data released on Friday showed Tokyo consumer prices in December fell at their fastest pace since September 2010, while nationwide retail sales slowed in November.

The BOJ 'summary of opinions' was also released last night.

BOJ divided on stimulus tweaks as pandemic stokes deflation fears

Bank of Japan (BOJ) policymakers were divided on how far to go in tweaking its stimulus programme, with some calling for an overhaul of its strategy for achieving 2% inflation, a summary of views voiced at the December rate review showed.
The policy examination will focus on tweaking the BOJ’s purchases of exchange-traded funds (ETF) and operations for controlling the yield curve, according to the summary of the Dec. 17 to 18 meeting released on Monday.
BOJ Governor Haruhiko Kuroda has said the policy review will not lead to big changes to yield curve control (YCC) and instead focus on fine-tuning the framework to make it more sustainable.
But some BOJ board members called for a more ambitious review as the hit to growth from COVID-19 stokes fears of a return to deflation, the summary showed.
“The BOJ must conduct a renewed comprehensive assessment on what strategy it should take in achieving its price target,” one of the nine members said.
“To avoid a return to deflation, the BOJ should assess its strategy, tools, and communication for achieving its price goal,” another opinion quoted in the summary showed.
In December, the BOJ extended the deadline for steps to ease funding strains for firms hit by COVID-19. It also unveiled a plan to seek ways to make its policy more sustainable, as the pandemic pushes prices further away from the 2% goal.
Some members said the BOJ could make its ETF purchases more flexible, so it can sustain the programme for a prolonged period and ramp up buying if markets turn volatile, the summary showed.
Others saw room to tweak the YCC’s operations such as by seeking to control yields “more carefully” and allowing for a moderate steepening of the yield curve, it showed.
Under the YCC, the BOJ guides short-term interest rates at -0.1% and 10-year bond yields around zero through massive bond buying.
It also purchases huge amounts of ETFs and other risky assets, a policy that has drawn criticism from some investors for distorting pricing and drying up market liquidity.

The minutes also touched on the exchange rate;

Risks of sudden changes in financial markets, including foreign exchange rates, also continue to warrant attention.

Worth keeping an eye on, with a couple of releases mentioning the 100 level last week.

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Alibaba Antitrust Fears Worsen China’s Internet Selloff

Alibaba Group Holding Ltd. led a selloff in Chinese tech giants triggered by fears antitrust scrutiny will spread beyond Jack Ma’s Internet empire and ensnare more of the country’s most powerful corporations.
China’s e-commerce leader on Monday raised a proposed stock repurchase program by $4 billion to $10 billion, effective for two years through the end of 2022. The buyback program, which began this quarter, failed to stem a slump in the shares, which slid more than 5% in Hong Kong to a six-month low.
Once hailed as the standard-bearers of China’s economic and technological ascendancy, Alibaba and rivals like Tencent Holdings Ltd. now face increasing pressure from regulators worried about the speed with which they’re amassing hundreds of millions of users and gaining influence over almost every aspect of daily life. Alibaba has shed more than $230 billion from its peak, battered by the deepening scrutiny and allegations of monopolistic practices at the crown jewel of billionaire Jack Ma’s empire.
Shares in Tencent and Alibaba rival Inc. slid roughly 2% in Hong Kong, while food delivery giant Meituan tumbled more than 4% as investors feared the antitrust net might widen further. Affiliate Alibaba Health Information Technology Ltd. posted its biggest two-day slump since July 2015.
The People’s Daily -- the Communist Party mouthpiece -- ran a commentary over the weekend warning Alibaba’s peers to take the antitrust investigation into Alibaba as a chance to lift their own awareness of fair competition.
“The Chinese government is putting more pressure or wants to have more control on the tech firms,” Jackson Wong, asset management director at Amber Hill Capital Ltd., said by phone. “There is still very big selling pressure on firms like Alibaba, Tencent or Meituan. These companies have been growing at a pace deemed by Beijing as too fast and have scales that are too big.”

UK - Hospital cases of Covid surge towards new high

Senior doctors have warned that the NHS is in danger of being overwhelmed with the number of coronavirus patients in hospital about to exceed the peak of the first wave.
There were 21,683 patients with Covid-19 in British hospitals on April 12, just before numbers started falling. On December 22, the last date with complete data for the whole country, there were 21,286.
Doctors in London said that their hospitals were beginning to resemble a “war zone” and those in Wales put out an urgent call for anyone with experience working in intensive care to come forward to help.
Members of the Scottish Academy of Medical Royal Colleges and Faculties said that NHS and public health services were facing a “bleak” situation and were “already severely stretched”. They were concerned that the highly infectious new strain “could lead to the NHS being overwhelmed”.
Michael Griffin, president of the Royal College of Surgeons of Edinburgh, which has members throughout the UK, said that the situation was the same across Britain. “January and February are going to be critical,” he said.
A nationwide Tier 4 lockdown “would probably be the safest way to reduce transmissions, reduce hospital admissions and reduce deaths, because it is easy to understand”, he said. “We have an effective vaccine in our grasp and, if we can get through the next six to eight weeks and get the really vulnerable vaccinated, then we are in a much better position.”

A quiet calendar today;