The dollar slid lower and global stocks ticked upwards on Monday, ahead of Donald Trump’s inauguration as the US President for his second term. The market is anticipating a flurry of policy announcements from the new administration, with traders betting on an 80% chance of the Bank of Japan raising interest rates this week.
Bitcoin reached a record high near $109,000, while stocks in Europe edged lower after an initial tick upward at the open. Bond yields inched upwards by 1223 GMT, with French and German benchmark bond yields ticking up around one basis point. The Canadian dollar touched a five-year low of C$1.4465 per dollar.
Investors are closely watching Trump’s presidency for signs of economic policy changes, particularly regarding trade. China is seen as the main target of the US President’s trade levies, with investors cheering better-than-expected Chinese growth data and a phone call between Trump and Xi Jinping that left both upbeat.
The yen rallied last week as Bank of Japan policymakers hinted at a rate cut, while commodities such as gold hovered around $2,707 an ounce. In commodities, Brent crude futures dipped on expectations that Trump may ease curbs on Russia’s energy sector in return for a truce in Ukraine.
Markets are expecting an initial response to the inauguration in foreign exchange and then during Asian trade on Tuesday. The US holiday also means that the first responses to Trump’s inauguration may be felt later in the day.
Source: https://www.reuters.com/markets/global-markets-wrapup-1-2025-01-20