US Close: Manchin plays Grinch, Lira reversal

It does not feel like the most wonderful time of the year for Wall Street.  US stocks are not seeing a Santa Claus rally and in fact remain stuck in the COVID house of pain. Senator Manchin played the Grinch this weekend when he said he won’t vote for President Biden’s Build Back Better Act. 

A deal could still happen in January as many traders remain optimistic that Senator  Manchin is willing to work with the Biden administration.  Last week he reportedly made an offer to support a $1.8T ‘Build Back Better’ bill that included universal pre-K and climate change initiatives, but excluded expanding child tax credit. Too much is at stake for the economy and pressure will grow on both sides to reach an agreement in January. 

The current omicron variant is providing headaches for many parents across the country as school closings jump from 356 to 646 this week.  Covid disruptions have been terrible for children and have also complicated parents’ abilities to return to the workforce. Vaccine updates from Moderna and Novavax were both positive for the fight against COVID.  Moderna’s study showed strong effectiveness against the omicron variant, while Novavax’s COVID vaccine was finally approved by European regulators.        


The lira resumed its spiraling plunge after Turkish President Erdogan left no doubt that his central bank’s unorthodox monetary policy will let the lira keep on collapsing.  Erdogan said, “Do not expect anything but interest rate cuts from me.”  Capital controls won’t be able to stabilize Turkish markets so the lira may continue to fall like a rock. 

The lira delivered a historic reversal after Erdogan announced new extraordinary measures to support the lira. Given the lower trading volumes going into year-end, some traders are saying that’s it for trading the collapsing lira. Until Turkey abandon’s its unorthodox monetary policy, some traders will fade the lira rebound.      

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Ed Moya

Ed Moya

Contributing Author at OANDA
With more than 20 years’ trading experience, Ed Moya was a Senior Market Analyst with OANDA for the Americas from November 2018 to November 2023. His particular expertise lies across a wide range of asset classes including FX, commodities, fixed income, stocks and cryptocurrencies. Over the course of his career, Ed has worked with some of the leading forex brokerages, research teams and news departments on Wall Street including Global Forex Trading, FX Solutions and Trading Advantage. Prior to OANDA he worked with, where he provided market analysis on economic data and corporate news. Based in New York, Ed is a regular guest on several major financial television networks including CNBC, Bloomberg TV, Yahoo! Finance Live, Fox Business, cheddar news, and CoinDesk TV. His views are trusted by the world’s most respected global newswires including Reuters, Bloomberg and the Associated Press, and he is regularly quoted in leading publications such as MSN, MarketWatch, Forbes, Seeking Alpha, The New York Times and The Wall Street Journal. Ed holds a BA in Economics from Rutgers University.