Blue wave euphoria washes out Capitol Hill riots

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By David Rothnie, Lewis McLellan, Sam Kerr
07 Jan 2021

Amid riots on Capitol Hill, the blue wave finally arrived. Georgia’s two run-off elections gave the Democratic Party 50 seats in the US Senate, and the majority, as Kamala Harris will hold the deciding vote as US vice-president. As this opens the door to greater fiscal stimuli, investors have responded by piling into equities, causing US Treasury yields to climb. This provides opportunities at the long end of the maturity curve for bold SSA borrowers. Lewis McLellan, Sam Kerr and David Rothnie report.

In the immediate aftermath of the US presidential election, it seemed that, Joe Biden would secure the presidency and the Democrats would control the House of Representatives, the Republicans would retain control of the Senate.

To many in the financial markets, this was a Goldilocks outcome, opening the ...

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