A source familiar with the state of US Congressional negotiations regarding further Covid-19 aid has suggested that the Democrats and Republicans are “closing in” on a $900B bill that would include a new round of stimulus checks. Moreover, the bill will include extended unemployment benefits, as well as “other avenues” for aid to State and local governments (which has been a key Democrat demand). Sources say that the bill is not likely to include corporate liability provisions (a key Republican demand).
The news comes after Republican Senate Majority Leader Mitch McConnell recently said that Congressional leaders have made major headway in working towards a Covid-19 aid deal.
Market Reaction
Fiscal stimulus hopes were behind solid gains across risk assets such as US equities and crude oil markets on Tuesday and it seems as though a deal might already be priced in, given the lack of positive market reaction in recent trade to this news. Less than one hour after the US equity cash open, the S&P 500 trades marginally positive and the Nasdaq 100 and Dow are both flat. Perhaps pre-FOMC meeting caution (the bank releases its latest monetary policy announcement at 19:00GMT) is contributing to the market’s indecisive feel on Wednesday.
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