January volumes were in line with 2020 monthly averages, but profits slipped rather markedly. Losses were driven by a rebound in USD and EUR retracement. Gold volumes were up primarily from its move lower early in January, and gold showed consistent profitability for brokers overall during the month. The latter part of the month was relatively flat but closed with an uptick in volume due to US equity volatility impacting the broad market.
Source: IS Risk Analytics Database. Past Performance is not necessarily indicative of future results
US President Joe Biden plans to be fully in line with allies before engaging with China on economic and other issues. China’s top diplomat stated that China and the US “stand at a key moment” to rebuild their relationship and repair the damage China believes the Trump administration caused. Experts do not expect and tariff cuts or other large policy changes from the US in the near term.
The economic fallout from Covid-19 may hit Europe harder than previously expected. The IMF upgraded its global growth forecasts in January but cut expectations for Europe by 1 percent. For the full year of 2020, the eurozone suffered its worst GDP decline in history at 6.8%. The current state of the virus on the continent and its impact on the economy are applying further pressure on governments to maintain, if not increase, the unprecedented levels of support currently in place.
Joe Biden was sworn in as President of the United States in January and is seeking to move quickly on a coronavirus relief package that he hopes to push through congress early in 2021. The President’s proposed package includes over $1.9 trillion dollars in spending across a wide variety of impacted sectors of the economy. Republicans have come forward with a more modest $600 million plan. President Biden has expressed that he will be flexible with the figures.