MNI US Open: Yields Rise With Biden Set To Unveil Stimulus

EXECUTIVE SUMMARY:

• BIDEN SET TO UNVEIL STIMULUS PACKAGE THURSDAY "IN BALLPARK OF $2TRN" (CNN)
• MCCONNELL HOLDS TRUMP'S FATE AS IMPEACHMENT HEADS TO SENATE
• ITALY'S CONTE FIGHTS TO RETAIN POWER AFTER JUNIOR ALLY QUITS
• GERMANY'S ECONOMY CONTRACTS 5.0% IN 2020

Fig. 1: Bad Year For German Economy (GDP % Chg)

BBG, MNI

NEWS:

U.S. (CNN): President-elect Joe Biden is expected to unveil a major Covid-19 relief package on Thursday and his advisers have recently told allies in Congress to expect a price tag in the ballpark of $2 trillion, according to two people briefed on the deliberations. The Biden team is taking a "shoot for the moon" approach with the package, one lawmaker in close contact with them told CNN, though they added that the price tag could still change. The proposal will include sizable direct payments to American families, significant state and local funding -- including for coronavirus vaccine distribution and other emergency spending measures -- to help those struggling during the pandemic. Biden is set to announce the details of his plan in Wilmington, Delaware, Thursday evening.

U.S. (BBG): President Donald Trump's unprecedented second impeachment heads to the Senate, where his fate rests with Republican leader Mitch McConnell, who now has more leverage than ever over the president in his final week in office. McConnell told Republican colleagues in a letter Wednesday he would block starting an impeachment trial before Joe Biden takes office Jan. 20 and control of the Senate shifts to Democrats.But he also said he has not yet made up his mind on whether to vote to convict Trump of inciting an insurrection that left five dead and damaged the Capitol, including the Senate chamber where he has spent much of the past 36 years.

ITALY (BBG): Italian Prime Minister Giuseppe Conte is struggling to hold onto power after a junior partner in his coalition pulled out, robbing him of his majority in parliament.Former Premier Matteo Renzi said Wednesday night that ministers from his Italy Alive party would quit the cabinet, attacking Conte for failing to do enough to tackle the country's problems. Though the party is tiny, Conte relied on it to maintain his majority. Conte may seek a confidence vote in parliament next week, newspapers including la Repubblica reported.

FED (MNI EXCLUSIVE, REPEAT INTERVIEW FROM LATE WEDS): Federal Reserve Bank of Philadelphia President Patrick Harker wants to see inflation heading above 2% before possibly dialing back asset purchases, calling for patience as the economic rebound from the coronavirus pandemic accelerates this year, he told MNI in an interview Wednesday. For full article contact sales@marketnews.com

GERMANY: The Covid-19 crisis led to a sharp contraction of Germany's economy in 2020, declining by 5.0% on an annual basis. After 10 years of expansion the pandemic triggered a decline in GDP almost as sharp as seen during the financial crisis of 2008/2009, when the economy contracted 5.7% in 2009, data showed. Destatis, the German stats office, noted that the industrial sector, which accounts for just over a quarter of the total economy, saw output fall by 9.7% on an annual basis. The industrial sector was particularly affected by the pandemic in H1.

U.K. (BBG): First Minister Nicola Sturgeon's Scottish National Party is set to win a majority at May's election to Scotland's devolved parliament in Edinburgh, according to a Savanta Comres poll for The Scotsman newspaper. Support for Scottish independence largely unchanged at 51% when undecided voters are included, poll shows.

EUROZONE DATA: House prices rose in Q3 on an annualized basis, rising 5.2% y/y the latest House Price index from Eurostat shows. Across the eurozone, prices rose 4.9% y/y, just shy of the 5.1% growth seen in Q1, largely ignoring any economic damage from the Covid-19 pandemic.

CHINA: Preparation for and ratification of the Regional Comprehensive Economic Partnership (RCEP), the trade deal recently signed with 15 countries in Asia Pacific, will be concluded in six months, China's Ministry of Commerce said Thursday. China started the ratifying process in December, Gao Feng, a spokesman for the ministry, said on Thursday at the regular briefing, noting it was now an ongoing process.

DATA:

No key data released in the European morning.

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