S&P Futures, Dollar Rise As World Awaits Trump Inauguration Speech
By Tyler Durden
Global shares were mixed, equity futures, the dollar and crude rose as investors focused their attention on today’s inauguration of Donald Trump as U.S. president. While the early tone is well bid, some traders anticipate a volatile session, with speculation that a bout of “sell the inauguration” could cap the aging Trump rally, which started with his inauguration.
Despite last night’s Yellen speech which was more dovish than her remarks just 24 hours earlier, and which suggested that the US economy is “not overheating”, the dollar managed to rebound from overnight losses and was trading 0.2% higher this morning. The early gains came after China reported its first economic expansion in 2 years (conveniently with president Xi in Davos) with GDP rising to 6.8% after quarters of decline.
However for the year, China’s GDP growth declined to the slowest pace in 26 years, despite a record debt load and record weak Yuan.
But it will be all about Trump today: tens of thousands of law enforcement officers and miles of barriers were in place in Washington D.C., as officials braced for hundreds of thousands of people planning to celebrate or protest the inauguration of Trump. The inauguration is “definitely a big moment for the markets,” said Neil Mellor, a London-based currency strategist at Bank of New York Mellon Corp. “We could get more clues about what Trump is planning today. If he ramps up the rhetoric the market will be concerned about building long dollar positions.”
“All eyes will be on the content and style of Trump’s inauguration speech,” Morgan Stanley’s Hans Redeker wrote in a note. “The more ‘Presidential’ this speech comes across, the better the outcome for markets.”
“[Trump is] likely to talk about job creation and unifying the U.S. and we may have to wait a bit longer for details on economic measures,” said Natixis fixed income strategist Cyril Regnat.
“It’s clear that investors have reached a level where they are prepared to wait and see what the Trump administration has to offer,” said Ric Spooner, chief market analyst at CMC Markets Asia Pacific Ltd. in Sydney.
Trump’s inauguration ceremony “will be followed by a speech that will be carefully decoded by those looking for signs of things to come in the new U.S. administration, an exercise that amounts to political astrology in an era characterized by a shakeup of the old rules of the game,” Citigroup’s chief global political analyst Tina Fordham wrote in note.
As Bloomberg notes, rallies in the dollar and equities are easing this week before Trump is sworn in as the 45th American president, with investors growing anxious for indications the administration will follow through on pro-growth campaign promises. Billionaire investor George Soros said the euphoria among stock investors since Trump’s victory will end as uncertainty takes over. The Dow Jones Industrial Average has churned in its tightest range ever over the past month.
European stocks opened weaker before recouping some losses to trade flat. Trading was …read more
Source: S&P Futures, Dollar Rise As World Awaits Trump Inauguration Speech
