US government bond yields dipped below 1 per cent on Wednesday for the first time since the Democratic party won control of the Senate, as investors fretted about new coronavirus variants, the slow pace of the vaccine rollout and obstacles to President Joe Biden’s promised $1.9tn stimulus package. The yield on the benchmark 10-year bond briefly slipped below the key threshold, pushed lower by investors buying up the haven debt in a broad retreat from riskier assets. It later settled at about 1.01 per cent. The yield on the 10-year note climbed above 1 per cent on January 6, as Senate run-off elections gave Mr Biden’s party control of both houses of Congress — prompting investors to price in the prospects of a more generous fiscal aid package that would feed through to inflation, knocking the value of bonds. A “short squeeze” that started on Wall Street swept across the globe on Wednesday, triggering another day of frenetic moves in the share prices of companies with large bets levied against them. The White House press secretary Jen Psaki said the Biden administration was “monitoring the situation” as shares of companies including GameStop, the hard-hit cinema owner AMC and BlackBerry surged in a volatile day of trading. The dramatic moves highlight the growing influence of retail traders, who have organised on the message board site Reddit. The group has focused on pushing up stocks that are the subject of large short bets by hedge funds. Their success in rallying the stock price of GameStop has vindicated a group now targeting companies on both sides of the Atlantic. Brussels has moved to tighten rules on exports of coronavirus vaccines outside the EU as the fallout escalates from AstraZeneca’s shock cut to planned deliveries to the bloc over the next weeks. Stella Kyriakides, EU health commissioner, on Monday proposed forcing companies to give notice beforehand of any plans to send shipments elsewhere in the world, as the bloc scrambles to boost its supplies of jabs. Officials say the tougher approach is expected to be modelled on a temporary scheme last year that required companies to seek authorisation for exporting Covid-19 personal protective equipment outside the EU. The commission held inconclusive crisis talks with AstraZeneca on Monday night over the production shortfall, which threatens to leave EU countries further behind the US and UK in Covid-19 vaccine rollout. As expected, the ECB left its policy settings unchanged today and, given the flexibility of its current policy of implicit yield curve control, will probably make no changes until the second half of the year. However, we suspect that the Bank will allow or encourage peripheral bond yields to fall further before then. Joe Biden hailed the resilience of US democracy and appealed for unity in a polarised nation as he was sworn in as the 46th president, completing a tumultuous transfer of power that was marred by the deadly attack on the Capitol. In his inaugural address on Wednesday afternoon, Mr Biden did not mention Donald Trump by name, but said the foundations of the country’s political system had been tested by his predecessor’s refusal to concede defeat. “We have learned again that democracy is precious, democracy is fragile and, at this hour my friends, democracy has prevailed,” Mr Biden said. In a 20-minute address delivered in a conversational tone, he called on Americans to come together to tackle the pandemic and economic downturn during what he described as a “winter of peril and significant possibilities”. Donald Trump became the first US president in history to be impeached for a second time as the House of Representatives charged him with “incitement to insurrection” for his role in stirring up a mob of supporters that stormed the Capitol last week. The House voted 232 to 197 on Wednesday in favour of impeaching the president after the riot that left five people dead, with 10 Republicans breaking ranks to join all Democrats in voting to charge Mr Trump. The single article of impeachment will be sent to the Senate, where the outgoing president faces a trial that will cast a shadow over the start of Joe Biden’s presidency and potentially prevent Mr Trump from running for office in the future. “Today, in a bipartisan way, the House demonstrated that no one is above the law, not even the president,” Nancy Pelosi, the Democratic speaker of the House, said before signing the article of impeachment at a ceremony after the vote. She added: “Donald Trump is a clear and present danger to our country.” In a statement on Wednesday night, Mr Biden described Mr Trump’s impeachment as “a bipartisan vote cast by members who followed the constitution and their conscience”. Donald Trump conceded that Joe Biden would become US president this month and condemned the “heinous” mob attack on Congress, putting an end to his unprecedented campaign to overturn the results of November’s election. In an abrupt change of tone on Thursday evening, the president accused violent demonstrators of “defiling the seat of American democracy” and said those who broke the law “will pay”. His comments in a video posted to Twitter came as Democrats mounted a push to forcibly remove him from office after he came under intense criticism for inciting the assault. The previous day he described rioters as “very special”. Mr Trump conceded that Congress had completed the certification of the election results and that “a new administration will be inaugurated on January 20”. But he stopped short of congratulating Mr Biden, who he did not mention by name. “My focus now turns to ensuring a smooth, orderly and seamless transition of power,” said Mr Trump, reading from a teleprompter. “This moment calls for healing and reconciliation.” He added: “Serving as your president has been the honour of my lifetime.” The video message followed a day of violent unrest in Washington that interrupted the certification of the election. US Capitol Police said that one of its officers died on Thursday night from injuries sustained “while physically engaging with protesters”, the fifth death resulting from the assault. “To those who engage in the acts of violence and destruction: you do not represent our country,” Mr Trump said. “And to those who broke the law: you will pay.” His words stood in sharp contrast with a fiery speech he delivered on Wednesday in which he said: “We will never give up. We will never concede . . . You don’t concede when there’s theft involved.” After Joe Biden won the US presidency in the November election, his victory was tempered by concern that he would have a Republican Senate majority blocking his agenda at every turn. But Mr Biden is now heading to the White House with many of his ambitions intact after his party claimed control of the Senate for the first time in six years. Wins by the Democrats Jon Ossoff and Raphael Warnock in two Senate run-off elections in Georgia this week mean the chamber will have a 50-50 partisan split, with Kamala Harris, incoming vice-president, having the tiebreaking vote “Georgia’s voters delivered a resounding message yesterday: they want action on the crises we face and they want it right now,” Mr Biden said on Wednesday morning. “On Covid-19, on economic relief, on climate, on racial justice, on voting rights and so much more.” The political feat of clinching the Senate with dual wins over Republican incumbents in the traditionally conservative southern state — where Democrats have not held a Senate seat since the early 2000s — is reassuring in itself for Mr Biden. The peaceful transfer of power in the US ground to a halt for hours on Wednesday after angry mobs of Trump supporters stormed the Capitol building and forced lawmakers to temporarily abandon the certification of Joe Biden’s presidential victory. The violent clashes capped two months of political turmoil during which President Donald Trump has repeatedly refused to accept defeat and stoked anger among his supporters by peddling baseless allegations of mass voter fraud. The incursion into the halls of Congress stoked fears about the resilience of America’s political institutions and raised questions about Mr Trump’s fitness to remain in office for the remaining two weeks of his term. Mr Biden said that US democracy was under “unprecedented assault” and called for Mr Trump to appear on national TV to “demand an end to this siege”. Moments later, Mr Trump appeared in a video posted to his Twitter and Facebook accounts, in which he repeated false claims that he won the election in a “landslide”. The outgoing president professed his “love” for his supporters, describing them as “very special”, while also urging them to “go home”. Republicans are counting on record numbers of supporters to show up at polling stations in Georgia on Tuesday and propel Donald Trump’s party to victory in two elections that will determine control of the US Senate. Mr Trump’s party is seen as the favourite to win both contests on Tuesday, given the Republicans’ long grip on Georgia politics. Republican candidates earned more votes than their Democratic rivals in a pair of Senate elections held on November 3, which resulted in Tuesday’s run-off contests because no one secured more than 50 per cent of the vote. However, the Republicans will need high turnout on Tuesday to offset what appears to have been a strong performance for Democrats during early voting. A large share of black, Asian-American and college-educated white voters have already cast their ballots, mirroring the coalition of supporters that helped Democrat Joe Biden clinch a narrow victory in the state in November’s presidential election. Germany is extending its lockdown until the end of January and banning non-essential travel in those areas worst-hit by the coronavirus pandemic, as it battles to control an upsurge in new infections. “We are appealing to people to reduce their contacts to an absolute minimum,” Angela Merkel told reporters after a videoconference with the leaders of Germany’s 16 federal states. The chancellor said infection rates were still too high and many hospitals were reaching the limits of their capacity. Germany also had to be “particularly careful” in view of the new viral variant spreading from the UK that was much more infectious than previous forms of the coronavirus, she said. The leaders agreed to keep schools and kindergartens closed until the end of the month instead of relaxing restrictions from January 10. Shops and restaurants will stay shut too. They also imposed an unprecedented curb on movement, decreeing that in areas where the number of new virus cases is above 200 per 100,000 residents over seven days, travel will be limited to a 15km radius. Bitcoin climbed above $34,000 for the first time on Sunday, extending a record-breaking rally in the volatile cryptocurrency that delivered a more than 300 per cent gain last year. With trading in key financial markets yet to commence in 2021, bitcoin has resumed its dizzying ascent, rising more than 10 per cent in the first few days of January. By late afternoon in London on Sunday, it had given up some of its early gains to dip just below $33,000. “This is an amazing moment for this country,” Mr Johnson said in his New Year’s message, released to coincide with the end of the Brexit transition period and the end of Britain’s 47-year legal and institutional ties to the EU. The prime minister has played down the “non-tariff barriers” to trade with the EU thrown up by Brexit — including an estimated £7bn in bureaucracy for business — and their potential impact on the integrity of the UK. Aside from inflaming nationalist sentiments in Scotland, Brexit has also placed new obstacles to trade between Great Britain and Northern Ireland; the region, which also voted against Brexit, remains part of the EU’s customs code. |
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