Trump’s First Week: Markets Stay Chill While the Buzz Builds
After the inauguration, traders leaned back, closed their laptops, and sighed a collective “nah, I’m good.” The economy didn’t feel the heat yet, but a storm of headlines and a jam-packed schedule is on its way, so stay tuned.
What’s In Store Next Week — Grab Your Coffee
- Policy Pulse: The administration’s big‑wig agenda will roll out decisions that could shake up everything from trade to finance.
- Earnings Extravaganza: Corporations will spill the beans—profits, losses, and all those “we’re thriving” statements that investors love to dissect.
- Headline Hijinks: Media speculation will heat up, adding a layer of drama that’s almost as exciting as a reality‑TV finale.
Why You Should Pay Attention
Even though the market was pretty calm last week, the coming days could bring a mix of surprises. Think of it as a recipe: a pinch of policy changes, a dash of earnings reports, and a whole lot of headline curiosity—all whisked together to keep the market simmering.
Ready for the Next Week?
Keep your eyes on the ticker, hand out coffee to your colleagues, and watch the market respond. They’ll either stay steady or go on a wild roller‑coaster ride—either way, it’s a thrilling watch.
The week that was, themes
Trump Returns, but the Market Gets Nothing New
When I pulled up my notebook to jot down this week’s market recap, the first thing that popped into my mind was “damp squib.” Because, honestly, President Trump’s return to the White House was about as exciting as a rainy Sunday afternoon.
Trade Talk: The Promise That Never Arrived
Remember the hype about nationwide tariffs hitting “Day 1”? That never materialized. Neil—a.k.a. Trump—kept hinting that trade talks might spill into February 1st with Canada and Mexico, but it looks more like a ploy to get folks back into a meeting before a fresh USMCA renegotiation next year. So, for now, market watchwoman Warren looks at a calendar page that says: No tariffs, no trade breakthroughs.
Tax Talk: A Gagged Giggles… Literally
Taxes? They’re basically “no comment.” Even though Trump keeps flashing that memory from his first term—“lower oil prices, lower interest rates”—he hasn’t shown the board a single spreadsheet. The claim that he’s the Fed Chair’s better buddy on monetary policy is just a funny footnote. Honestly, if I had to pick a policymaker to hit the 2009‑style stimulus tape, it’d be the actual Fed Chair, not a novelist‑turned‑president.
Market Takeaway
Bottom line: Trump’s “bark” is louder than his bite. That has given investors a breather and pushed implied volatility levels away from the pre‑special‑election highs. Except, maybe, if a surprise tariff sparks a trading frenzy — but that feels unlikely right now.
Quick Summary
- Trade announced: No tariffs yet.
- Tax policy: Say‑nothing.
- Market reaction: Volatility cooler.
So, the grand White House drama that everyone was craving? Maybe a bit of a letdown. But there’s peppered hope that next year’s USMCA talks might bring something interesting to the table – if you can wait that long.
Trading in a Trump‑Touched Market
First things first, even though the first week’s trading floor felt quiet, it’s still a tad early to declare the Trump risk a thing of the past. Market players have a sneaky tendency to let that absence of a concrete play be a reason to throw caution to the wind – a perilous move that would be downright foolish.
Why Everyone’s Feeling on Hold
- Uncertain Policy Path: Traders are having trouble projecting what will happen next, because, frankly, nobody knows where the policy lines are going to dodge or march.
- Reluctance to Act: Nobody wants to be that person who slides in a trade only to find the market has spun the opposite way while they’re scrolling through a Trump tweet.
- Waiting Game: The market is basically playing “Wait‑until‑I‑have‑clearer‑info.” Until the signal gets sharper, everyone’s holding off.
More Than Politics
While Trump’s social media cues keep the market on a rollercoaster, recent days have stirred up a few other talking points worth noting.
Bank of Japan Goes on a Rate‑raising Ramp
As we tipped, the Bank of Japan didn’t hold back. It pushed the policy rate up by 25 basis points, nudging it to 0.50% – the highest level it’s hit since 2008. A solid move that’s adding a bit of spice to the global monetary policy landscape.
Bank of Japan’s New “Hike” and the Shake‑Up of Global Carry Trades
When the Japanese central bank announced another rate rise, many were surprised… until they read the pre‑meeting leak spak. A flood of insider chatter had already painted the outcome, so the policy step looked like a spoiler‑filled ending that everyone had prepared for.
Ueda’s Calm & the “No‑Preconception” Post‑Press
Governor Ueda kept his cool at the press meeting. He reminded everyone that the Bank of Japan sees itself as a “no‑preconception” policy maker – not picking a date the next hike will jump in or setting a ceiling for how high the rates can climb. In short, they’re letting the economy write the script, and observers have to check their own expectations.
What This Means for Carry Trades in 2025
- Reduced Divergence: With the BoJ tightening, the monetary gap between Japan and the West shrinks. That’s bad news all on its own.
- Higher Volatility: The squeeze will likely lift market swings, turning the “shrinking gap” into a double‑whammy that rattles carry‑trade traders.
- Not a Global Equity Catastrophe: While a large‑scale unwind isn’t the biggest threat to global stocks, it’s a puzzle piece you should keep on your radar.
Norges Bank Keeps It Steady — Yet Eyes a Cut in March
The Norwegian central bank stayed on hold, but it’s a clear sign that the next down‑beat is slated for March. Imagine that in a world where the last drop of oil hits your wallet faster than the last ducky in a game of “find the egg.”
ECB Footsteps: 25 bp Cut on the Horizon?
The European Central Bank had a buzz‑worthy flurry of speeches this week, all echoing that they’re not done yet. A potential 25 bp cut this Thursday is still on the agenda. The common thread? “Data‑dependent” policy, with an eye on more easing if the metrics say so.
Friday’s Perfect Bonus for the Eurozone
Despite the austere talk, the week ended on a gold‑mine note. PMI surveys out of the euro, Chile, and Costa Rica beat expectations and gave a turbo boost to an otherwise grinding economic rally.
So, the message is crystal clear: central banks are tightening, volatility is up, and the story boards are reshuffling. Stay ready and stay curious – the markets aren’t going to hold the drama any longer!
Eurozone & UK PMI Grown Ups: A Few Headlines to Cheer About
Eurozone Is Back on the Rise—But Just Barely!
The latest flash PMI glimpse shows the composite gauge tipped back into growth territory, swinging up to a 5‑month high of 50.2. It’s only a hair over the “break‑even” threshold—so it’s a small win, but in the eurozone, every bump upward is a celebration worth a round of beers.
Think of it like a Spurs fan waking up early to watch a trailer: “Did you see that small goal? This is the hype!” Even the tiniest triumph gets trumpeted.
UK PMI—The Big Surprise Pack
Across the pond, Britain’s PMI data also broke out of the ordinary. The manufacturing, services, and composite indices all climbed to 3‑month highs, giving fans something to toast.
Still, the optimism is a bit muted. The report flags that, outside of pandemic resets, the UK is shedding jobs faster than it’s done since 2009—an uneasy reminder that the economy’s shake‑up is still in motion.
Quick Take‑away: The Numbers & the Feelings
- Eurozone PMI just crossed the 50‑mark; a slim, but positive step.
- UK PMI saw solid upside across sectors; the country is looking brighter.
- Job cutting remains a concern—keep your eyes on the numbers.
Bottom line? Even if the differences are borderline, those data points are the kind of news that keeps markets hopeful, like a team that just pulled off a winning run. Keep listening to the pulse—economic growth is still in the mix!
Budget Bites: Why Your Wallet Might Feel the Crunch
The Cost Conundrum
Chancellor Reeves can jaw‑walk through any number of TV studios, yelling about a “mission for growth”. But behind that cheerleader vibe lies a stark truth: October’s Budget has slashed the British economy’s playing field by pumping new costs into the mix.
- Inflation’s new best friend: Businesses are feeling the heat, with higher operating expenses cutting into every sprint‑and‑run.
- Choked roads: The very same moves meant to light up the hive are, in reality, tightening traffic and slowing momentum.
Unemployment Ushers in a Curious Surge
Late 2024 saw unemployment climb to levels it hasn’t seen since May – a real eyebrow‑riser. When the clock ticks into 2025, the uptick is likely to continue, turning a quiet economy into a restless one.
- Jobless miles to go: The numbers suggest a looming wave of job losses as companies struggle to keep the lights on.
Stagflation: The Silent Scream of UK Assets
There’s almost nothing to cheer about when it comes to GBP assets. The UK is tangled in a classic stagflation scenario: inflation sticks around, growth stalls, and the currency takes a measly tumble.
- Hard to breathe: The economy’s been fighting a tug‑of‑war between stagnant output and rising prices.
- Grow? Grow? Eh: The “mission for growth” narrative feels more like a warm blanket hiding an iceberg below.
In short, while the Chancellor keeps chanting her growth gospel, the reality paints a wilder, more cautionary picture. The budget’s lofty promises may feel more like a balloon that’s popped, leaving us with snug pockets and a grim economic outlook.
The week that was, markets
Stocks on a Winning Streak
Believe it or not, the old saying keeps holding true: the stock market is not the economy. This week, markets seemed to nod in agreement. The London FTSE 100 slipped a touch after hitting a fresh record, while Germany’s DAX enjoyed another week‑long win, smashing yet another all‑time high. The pan‑European Stoxx 600 also stayed on a winning streak, rising for a fourth consecutive week.
Wall Street Keeps Pace
- By the mid‑week bullish swell, the American S&P 500 rolled into back‑to‑back weekly gains.
- The index also set new record highs along the way—talk about a double‑header Sunday!
- Notably, it tallied the best first week of a presidential term since the era of Reagan. The Oval Office’s current resident probably won’t need a microphone to brag about that.
In short, if markets were a party, they’d have a glittering glitter‑bomb of earnings for everyone. Though they’re not exactly telling the entire story of the economy, they’re still worth a look… and perhaps a meme or two.
Wall Street’s Road to the Skyline
Even without the comforting “Fed put” cocoon, the market’s upward trajectory looks steady. Solid economic expansion and earnings that keep pushing the lights on are enough to keep the bulls—most of us—feeling optimistic.
Looking Ahead: A Week of Risk and Results
There’s a crucial week coming on the horizon filled with corporate earnings and event-driven twists. It’s not outlandish to anticipate a few traders trimming positions as a safety‑net for the anticipated rally.
Currency Cruise: Dollar Drift
Speaking of drifts, the dollar slipped nearly 2% against its peers, marking its toughest week since late 2023. It’s a textbook “buy the rumor, sell the fact” dance: investors were anxious about the new administration, only to find the reality a bit milder than feared.
- Not all G10s are down – every major currency fought back against the greenback. The pound (GBP) hit its best round‑up in two weeks.
- Euro’s climb – the EUR pushed past the 1.05 mark after Friday’s robust PMIs, showing the market’s eagerness for euro‑strength.
- Other allies – the AUD, NZD, and CAD also rebounded noticeably.
Why the Dollar Dropped: Profit‑Taking, Not Shock
Much of the dollar’s decline is tied to traders shedding long positions and securing profits, rather than an outright sentiment shift. Even the options market tells a different story: there’s still a bullish undercurrent—the big picture of risk reversals shows that G10 puts continue to trade at substantial premiums over calls, signalling a quest for upside protection in a stronger USD.
All in all, Wall Street is poised to rise, but a thunderstorm of earnings and new administrative moves keeps traders on their toes. We’ll keep watching the market’s dance and report any moves that may light up the financial stage.
Why the Dollar Still Rules the Roost
In plain terms, the US is in the running for a long‑term win‑win. Economic growth is still smashing the competition, and the Federal Reserve is pulling wagons in a hawkish tow, leaving its European peers in eager, sweaty chase. So sitting on the sidelines? hard call. I’m literally lining up to snag every dip in the currency chart. The USD is the big dog, and I think it’s got the leash!
Treasure Treasures… Hold on…
Last trading week, U.S. Treasuries didn’t exactly gallop to glory. They were stuck in a shallow pond, waving their wings in the wind, caught between two storms:
- Trump‑related jitters – Investors keep forgetting that the president’s playbook doesn’t always deliver predictable returns.
- Supply pile‑up – A hefty bundle of bonds is about to hit the market, adding extra weight.
- FOMC on deck – Everyone’s waiting for the next move from the Fed, which could swirl the whole pot.
The verdict? Pessimism and indecision ruled the day.
Oil: The Volatility Vortex
Meanwhile, crude oil had one heck of a rollercoaster. WTI hit a low that nobody saw coming – the worst drop since last November. And, oh‑snap, Brent dipped below $80 a barrel again. What’s the cause? It’s less about Trump’s “lower prices” drama and more about the U.S. “drill baby, drill” push. The plan is a slick drill strategy, but the demand side is as bleak as a winter line in the Desert.
Bottom line? The cloud of “perfect storm” is hovering, and the price slide looks more likely than a UFO sighting.
What If We’re Wrong?
Picture this: oil bargains, a hopeful uptick, then a sudden catch‑up from global supplies. That would produce a supply‑squeeze set, crushing the resale value of crude. But hey, if that happens, the real drama remains on the back‑of‑the‑credit‑roll. Investors, buckle up!
Gold’s Glitter Continues: A Quiet, Shiny Surge
Lights, Camera… and a Gently Dazzling Gold Touch
Gold’s been keeping its sparkle alive, snatching joy with a four‑week streak of gains that’re still whisper‑quiet in the market. Right now, the shiny yellow metal is hovering just $15 shy of the record high set last October in the spot market—no glittering hype, but plenty of promise.
Why Doesn’t the Press Notice?
Turns out the coverage is smaller than a speck on a beach: news mentions are roughly 30% less than when gold hit its peak last time. That’s a clever, albeit rough, way to say “the market’s feeling a bit light on hype.” In other words, investors aren’t going all‑out fan‑boy mode.
What’s Brewing Below the Surface?
- Gold’s steady, mild climb—no hard‑pour advertising.
- The price is already near October’s all‑time peak, and a touch away from breaking it.
- Lower media buzz suggests positioning remains cautious.
- All‑time highs feel like a postcard‑ready destination—just a handful of tweets away.
So, the golden ticket may still be in the oven, and while the buzz is low, that’s a sign that reaches for new highs are very much on the menu. If you’ve been watching gold with a sprinkle of skepticism, this quiet rise might just be the calm before the glittering storm.
The week ahead
Ready, Set, Risk!
The next few days are packing a total risk-fest into your calendar. Think of it as a party where everything’s a gamble—and the agenda is brimming with juicy topics for everybody to dive into.
What’s on the Menu?
- Market Shifts: How the trend radar flips on a dime.
- Cyber Defense: Are your shields up, or just four patches a day?
- Capital Allocation: Choosing the right slice of pie—or pie chart.
- Geopolitical Buzz: Power plays that could shake the global grid.
- Tech Upgrades: From cloud nine to deep‑dive debugging.
So grab your metaphorical knife and fork, because this week’s events are ready to serve up plenty of bite‑size challenges. It’s time for everyone to get their teeth into something big—and, honestly, why not have a little fun while you’re at it?
What’s Cookin’ In The World Of Money?
Coincidence? Not at all. The big bosses of global finance are about to drop some serious news: the FOMC, ECB, Riksbank, and Bank of Canada are all set to make their first moves of the year.
FOMC: “Hold the Line”
We’ve got a steady 4.25%‑4.50% range for the fed funds rate. The committee decided to skip January – essentially pulling a “let’s take a breather” move to see how that 100 bp of rate cuts from last year played out and how President Trump’s early policies might affect the econ forecast.
Let’s face it: the U.S. labor market is rock‑solid, inflation is heading down (sort of), and the Fed feels comfy keeping things the same for now. But expect some vague, data‑driven hints for Q1 – you’ll be hearing a lot about whether that January pause turns into a longer “stay‑put” stretch.
ECB: “Just Keep Rolling”
Unlike our American friends, the European Central Bank isn’t about to hit pause. Think about it: growth risks are still humming, politics in France and Germany are brazenly uncertain, and inflation might not hit the 2% target. Lagarde is heading to declare a 25 bp cut this week. No promises on future moves, but the trend looks set to keep cutting until the deposit rate hovers between 2.00% and 2.50%.
Riksbank & Bank of Canada: “More Cut, More Cut”
Both are planning another 25 bp dip this week. Their guidance? Keep the cuts coming for the next few months.
Key Data Drops & Corporate Boom
- First Q4 GDP estimates for the U.S. and the Eurozone – anticipation that U.S. is still moving ahead while Europe is stuck in place.
- Australia & Germany’s CPI, plus U.S. PCE inflation numbers.
- U.S. continuing jobless claims for the January NFP week.
And if that’s not enough, 102 S&P 500 constituents are reporting over the next five days. The spotlight? Magnificent Seven – Tesla, Microsoft, Meta, and Apple. Together, they carry an 18% weight in the S&P and a hefty 24% in the Nasdaq 100. Their reports could send the market dancing or wobbling, with ripple effects on risk vibes worldwide.
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