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REFILE-MORNING BID-Keep calm - more stimulus is on its way

Sujata Rao
·2 min read

(Adds dropped words in para 7)

By Sujata Rao A look at the day ahead from Danilo Masoni

U.S. President-elect Joe Biden is preparing to outline today his plans for another round of big fiscal stimulus in the world's largest economy and a CNN report that the boost could be worth around $2 trillion has put investors in an upbeat mood.

The news is overshadowing Donald Trump's impeachment, with Japan's Nikkei scaling a new three-decade high and European and U.S. equity futures pointing to a positive start.

Robust trade data from China is also keeping the bulls running, alongside reports the Trump administration has scrapped plans to blacklist Chinese tech giants Alibaba, Tencent and Baidu -- Hong Kong-listed Alibaba and Tencent shares are around 5% higher.

Now markets are eager to hear from Fed Chair Jerome Powell after other officials talked down the prospect of a scaling down its massive bond buying programme. With one even mooting the possibility of more asset buys and strong demand at a 30-year debt sale, U.S. 10-year bond yields are back at 1.10%, around 9 basis points off highs hit earlier this week.

Meantime a new government crisis in Italy could liven up bond markets in Europe, even though it comes as little surprise for a country that has had 131 government in the last 160 years. ECB bond buying also means its impact could be cushioned.

On the corporate front, France has voiced its usual objections to the $20 billion offer for retailer Carrefour by Canada's Couche-tard. Earlier, Taiwan Semiconductor TSMC) confirmed how remote working is fuelling demand for devices requiring high-end chips. That drove quarterly profits to record highs.

Key developments that should provide more direction to markets on Thursday: -Fed chair Powell speaks -UK RICs housing survey -Germany 2020 GDP -US initial jobless claims -Fund giant BlackRock reports quarterly earnings -Tesco Britain's biggest retailer followed rivals in reporting buoyant Christmas trading, with UK like-for-like sales growth at 8.1% in the six weeks to Jan. 9.

(Reporting by Danilo Masoni)