20/01/17 - Markets Await Donald Trumps Inauguration Speech

USD

Donald Trump's inauguration day has arrived, as he is set to enter the White House today as the 45th President of the United States. 

The eyes of the world will be on Mr Trump as he gives his inaugural address. Trump will be expected to set an agenda for his first 100 days, and market participants will be waiting to see which campaign trail pledges he will be looking to push through.

The dollar lost momentum this morning during Asian trading hours as U.S. Federal Reserve Chair Janet Yellen spoke of a gradual pace of rate hikes and sounded less hawkish than some had expected, while investors braced for U.S. President-elect Donald Trump to be sworn in.

EUR

Yesterday, the ECB announced that it was keeping both its main rates and bond buying programme unchanged. This was despite the uptick seen recently in inflation, across the Eurozone.
 
ECB President Mario Draghi called on Germany to try to be patient, as the European Central Bank continues injecting stimulus into the euro area, saying rising inflation will eventually bring higher interest rates for savers. Germany has been critical of the ECB, and German Finance Minister Schaeuble had responded to the ECB’s decision by saying his government will face “political problems” explaining the policy to the public. The December decision to reduce asset purchases to 60 billion Euros a month in April, from the current 80 billion, was reaffirmed.
 
Draghi also mentioned that officials are keeping a close eye on political uncertainties stemming from a number of general elections, Britain’s upcoming exit from the EU, and the start of Donald Trump’s Presidency. He felt that downside risks to the euro area are mostly from “global factors.”

GBP

Speaking at the World Economic Forum in Davos, Switzerland, yesterday, Theresa May insisted that she valued the contribution that banks make to Britain’s economy, despite signals that they are packing their bags in response to Brexit.
 
May said “Financial services are of huge value to the British economy. And of course the services that fit around the banks, asset management companies and insurance companies, are important to us as too.”

The industry pays 60 to 67 billion pounds in taxes each year, and the Treasury will certainly suffer a hit if London bankers leave.

Key Announcements

09:30 AM – GBP : Retail Sales m/m, expected at -0.1% against a previous of 0.2%

Tentative – President-Elect Trump speaks