Control of the Senate is at stake
While we are all trying to get back into the rhythm of things, just be reminded that there is a key risk event to look forward to this week that could potentially give investors some reason to be a little more shifty.
The Georgia runoff elections will take place tomorrow and I put up a little preview on that earlier last week here.
What is really at stake going into the runoffs tomorrow?
In my view, it's largely about symbolism at this stage. Even if Democrats sweep both seats, I doubt it will change anything on the whole saga of increasing virus relief checks from $600 to $2,000 - despite McConnell being the key blocker now.
However, should that scenario take place, it secures a 'blue wave' outcome in the election by the finest of margins.
There might be concerns that Biden may look to push more drastic changes on corporate taxes but I doubt that would fly given such a slim "majority". But near-term market sentiment may still react to that, so it is a considerable factor in trading this week.
In any case, either outcome doesn't do much to change the dollar trajectory at this stage but perhaps a Democrats sweep could imply more negative sentiment for the greenback - and Treasuries - amid the prospect of more spending.
That said, Republicans are still favourites to at least win one seat and keep control of the Senate. So, that should at least keep the status quo to start the new year.
