Riskometer tilting positive in Asia...

Most indices are in the green, Japan lagging...

China tech got a boost - Alibaba shares surging ~6% after Jack Ma popped up safe and sound for a livestream with some rural teachers

Tech also leading the way in U.S. futures...

Yellen faced the Senate yesterday - What did Janet say?

The huge deficit is a cause for concern, especially among Republicans

Yellen said a key metric to watch is the cost of debt interest payments relative to the size of gross domestic product. It’s now below where it was in 2008 during the financial crisis, she said.
That reinforces the argument for using deficit financing to help the pandemic-battered economy, she said.
“To avoid doing what we need to do now to address the pandemic and the economic damage it’s causing would likely leave us in a worse place fiscally and with respect to our debt situation,” Yellen said.
“...it’s essential that we put the federal budget on a path that’s sustainable.”
She nodded elsewhere in the hearing to Biden’s plans to boost some taxes in time.

Short version...

The deficit is tomorrow's problem, spend all the money now while interest rates are low, get the economy back on track and then we'll talk about balancing the books...

Janet Vs The Deficit

Yellen also said she’d take a look at proposals to launch a 50-year Treasury bond, although potential demand for these bonds is said to be low...

“The Treasury has delved into this topic several times before and concluded that the demand dynamics do not support ultra-long bond issuance,”
- Subadra Rajappa, head of U.S. rates strategy at Societe Generale SA

If only there was some kind of buyer of last resort...

How could such a measure potentially be justifed?

“Climate change is an existential threat,” Yellen said. “Both the impact of climate change itself, and policies to address it, could have major impacts creating stranded assets, generating large changes in asset prices, credit risks and so forth that could affect the financial system.”

On the dollar...

“The United States does not seek a weaker currency to gain competitive advantage and we should oppose attempts by other countries to do so”
Yellen also said she would work “to oppose any and all attempts by foreign countries to artificially manipulate currency values to gain advantage in trade.”

Republicans aren't keen on the proposed minimum wage increase (to $15 an hour from $7.25) in Biden's plan

Yellen pointed to a “large economics literature” that examines minimum wage increases in individual states, saying
“The findings are that the job loss is very minimal, if anything.”

Walmart's CEO disagrees with the universal minimum wage, and called for a higher wage that takes into account “geographic differences” and “small business.”

Bitcoin also took a hit yesterday after Yellen's comments

“many cryptocurrencies are used, at least in a transaction sense, mainly for illicit financing and I think we really need to examine ways in which we can curtail their use and make sure that anti-money laundering doesn’t occur through those channels,”

No-one thought to ask if the U.S. Dollar has ever been used for the exact same things...  

Cryptocurrencies are continuing their flow into the mainstream, and EQUOS are setting the standard...

EQUOS is a digital asset exchange built to institutional standards & available to everyone.

They've created a truly institutional-grade infrastructure while enabling anybody to join. Users can enjoy a higher level of security, capital efficiency and reliability.
Founded on real-world values of fairness and equality to promote liquidity and help build long-term equity.

With a focus on innovation, transparency, and trust, EQUOS is a part of Diginex, the first Nasdaq-listed company with a cryptocurrency exchange.

And they've dropped fees to ZERO for the whole of January!

Zero Fees January

Yellen channelled her inner Trump when speaking about China...

“China is undercutting American companies by dumping products, erecting trade barriers and giving illegal subsidies to corporations,”
China is an “important strategic competitor.”
China also has been “stealing intellectual property and engaging in practices that give it an unfair technological advantage, including forced technology transfers,” “These practices, including China’s low labor and environmental standards, are practices that we’re prepared to use the full array of tools to address.”

As the hearing took place, outgoing Secretary Of State Pompeo formally declared China's actions against Uighurs "genocide" & Biden's nominee for secretary of state, Tony Blinken agreed with the designation.

Avril Haines, President-elect Joe Biden’s choice for the top U.S. intelligence job also said that the U.S. should take an “aggressive stance” toward the threat posed by the aggressive and assertive China that it faces today.

The message from the incoming administration is consistent, and Pandora's box is well and truly opened when it comes to China...

Biden's inaugaration will take place at around 5PM (GMT) today.

In other market news...

ECB Is Capping Bond Yields But Don’t Call It Yield Curve Control

The ECB is buying bonds to limit the differences between yields for the strongest and weakest economies in the euro zone, according to officials familiar with the matter, with one person saying the central bank has specific ideas on what spreads are appropriate.
An ECB spokesman declined to comment.
While that strategy is similar to yield curve control, “they’re calling it something different,” said Christoph Rieger, head of fixed-rate strategy at Commerzbank AG.
“My feeling is that this is an important thing for the ECB, they’re looking at it and they’re actually envious of the BOJ.
They would love to have something like that.”

Explicit yield goals also make exiting the policy a challenge. Investors are likely to dump bonds, driving up borrowing costs, the moment they perceive the target is about to be dropped.
That may ultimately mean the ECB has an edge with what Lagarde has described as an “holistic” approach to maintaining favorable financing conditions.
“It’s not as explicit as the Japanese do it, but broader,” said Florian Hense, European economist at Berenberg. “Once it’s out that you explicitly control the yield curve, this commitment can be very expensive.”

Utrust are making crypto payments easy.

Spend crypto on everyday items.
Receive crypto payments for your business, it's all possible.

Utrust is a truly revolutionary project, read more about it here...

Utrust - Crypto Payments Made Easy
Macrodesiac partnered with Utrust, some people asked me why... How it started; > Oh wait what?! I can accept BTC payments now??? — David Belle (@davidbelle_) June 12, 2020[https://twitter.com/davidbelle_/status/1271413726965567488?ref_src=twsrc%5Etfw]Utrust have come a long way in a short time…

Netflix smashed expectations in Q4.

  • Revenue: $6.64 billion versus $6.63 billion expected
  • Earnings per share: $1.19 versus $1.36 expected
  • Global paid subscriber additions: 8.51 million versus 6.03 million expected

More earnings due today...

Calendar highlights: Inflation data from the EU & Canada, BoC rate decision (no change expected).