Despite vaccine efforts no breather yet

Following indications of tapering and scaling down of US QE bond purchases Fed President Powell reaffirmed markets that this is “not the time”. Treasury yields edged higher on rising inflation expectations following Powell’s speech and on President-elect Biden’s $1.9 trillion stimulus package. A damper came from jobless claims that approached 1 million last week. Also, Italy saw upward pressure on its bond yields following the outbreak of political crisis in Rome, and potential political paralysis risks delaying support to the economy. Positive news on vaccines with gradual rollout are still insufficient to contain the epidemic, with countries further tightening sanitary restrictions. Germany considers a mega-lockdown, while China put over 22 million under lockdown…