Good morning all,
It’s been a weekend that would have left many traders licking their wounds after last week’s market moves on the back of Donald Trump’s Presidential election win. With protests still raging across the US, the feeling of shock has clearly not yet subsided, however President Elect Trump has already backed down on a number of policies he wanted to put into action, most notably saying he will now not fully repeal ObamaCare.
His persona since his election win cannot be underestimated as a calming influence on the financial markets. Trumps victory speech was the initial catalyst for the move higher in markets, and his interview over the weekend for US chat show 60mins also showed a calm, collected and level headed Donald Trump. A far cry from the man the world saw during his campaign.
Elsewhere it’s been a busy night on the economic calendar in Asia as Chinese data was released with some mixed results, however the headlines were focussed on Japan as Kuroda warned of the risks of the economy growing too quickly as GDP beat expectations and posted growth of 2.2% vs 0.9%.
The economy has been boosted by demand internally as export figures have continued to fall and weigh on the reading. We know that any move in USD/JPY will be closely watched by the BoJ and Kuroda reiterated that stance, with the currency a key battle ground and tool for the central bank to control the economy.
As the week moves on the structure of Donald Trump’s White House will be a focus as will any comments from the man himself. For the first time it is important for investors to watch out for Mr. Trump's Twitter account. The world’s first ‘social media president’ has made big announcements on his account in the past, as well as commenting on big news stories, so a tweet or two definitely has the potential to move markets.
On the economic calendar today we will focus on industrial production out of the Eurozone first thing this morning, but then a speech later in the session by Mario Draghi will take centre stage as well as the normal Fed Speak. Of course central banks will be in focus ahead of the December meetings of both the ECB and the Fed, and while the new calm Donald Trump is still speaking to the media the moves in December by both the ECB and the Fed remain firmly on the table.