Wednesday preview: Georgia elections, US ADP jobs report
Should the result of the two run-off votes in Georgia go their way, Democrats will almost have a blank check to push forward their legislative agenda, likely including higher government spending and taxes.
That could have significant implications for the economy, investors' asset allocation choices and cross-asset price moves.
"The biggest risk event of the month is finally here, and Wall Street appears to be comfortable with the possibility that Georgia could deliver a blue wave," said analyst Edward Moya at Oanda.
"Some investors are also feeling confident that Republicans will end up winning at least one seat tonight (or tomorrow morning). The new Democrats that voted in Biden might like the idea of having a divided government and will either possibly vote for Republicans Perdue and Loeffler or just not vote for the Democrats Warnock and Ossoff."
According to Moya, investors would be keeping close tabs on the degree of voter turnout in the northern Georgia congressional districts, which could augur well for Republicans.
Against that backdrop, at 1315 GMT, consultancy ADP will release its private sector payrolls report for December, which will provide markets with a foretaste of Friday's all-important non-farm payrolls number.
It will be followed after the market close in London by the minutes of the Federal Open Market Committee's last rate-setting meeting.
Service sector Purchasing Managers Indices are also due out in the euro area and the UK, with the latter expected to be unchanged from a preliminary reading of 50.7.
Further afield, rate-setters in Thailand are set to meet to decide on policy.
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