It has been a rollercoaster ride, with several moments when a blue wave looked unlikely, but the Democrat victories in the two Georgia State run-offs mean that the Democrats will control both the House of Representatives and the Senate. In terms of the latter, the two Democratic wins will mean that the Senate is exactly split 50-50, with the deciding vote going to Vice President-Elect Harris. It will be the first time since 2010 that the Democrats control the Presidency and both houses of Congress.
The market reaction has seemingly focused on the prospects for reflation, with equities being led higher by value and cyclicals, rising inflation expectations and higher yields. Indeed, 10-year Treasury yields have moved above 1% for the first time since March. The US dollar has weakened a little too.
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