The Day at a Glance | December 21 2020

The Top

· Congress reaches an agreement regarding a new fiscal package in the United States worth $900 billion dollars; voting could take place today.

· Dollar (DXY) records its largest daily increase since March after the United Kingdom announced new restrictions due to a new Covid-19 strain.

· Retail sales in Mexico dropped more than expected in October (-7.1% vs. -5.1% e., annual).

Economic environment

The Senate and House of Representatives in the United States will vote for a second fiscal aid package due to the pandemic today. If approved, this would be the second greatest fiscal stimulus in the country`s history. The package includes an additional $1.4 trillion dollars for government funding during the current fiscal year. The agreement was announced yesterday by leaders Nancy Pelosi and Mitch McConnell after intense negotiations took place in the last few weeks in order to reach an agreement before the end of the year. The package includes citizens receiving direct deposits worth $600 dollars, up to $300 dollars of unemployment benefits and $284 billion dollars for credit programs and aid to small and medium sized businesses. This last one includes a special item for airlines, schools and universities; in addition to funds for the distribution of vaccines. Allocation of resources towards local and State governments were left out of the package along with legal protection to businesses regarding lawsuits because of COVID-19. The stimulus package is expected to be approved with strong endorsement on behalf of legislators in both chambers and the White House has assured that President Trump is willing to sign it. The aid will be crucial to avoid a new contraction in the economy amidst the fast spreading wave of the virus.