As President-elect Donald Trump prepares to take office, financial markets are on edge, awaiting details of his administration's tariff policies. Investors remain cautious, reluctant to commit to any major trends until more clarity is provided on these tariffs. Headlines emanating from the Oval Office are poised to heavily influence trading patterns in the coming days.
On Monday, with Trump's inauguration set for 5 PM GMT, markets are bracing for potential volatility. Treasury yields have dropped sharply across the curve, indicating investor wariness. Meanwhile, risk assets have rallied, reflecting a mix of uncertainty and speculative positioning. The US dollar has fallen against all its G10 peers, highlighting the currency market's sensitivity to the impending political changes.
The pound and the Canadian dollar are struggling with domestic issues, adding another layer of complexity to the currency landscape. Gold, a traditional safe-haven asset, has maintained stability, trading flat above $2,700 on Monday despite an earlier decline during the Asian session. This stability underscores traders' concerns as they await Trump's swearing-in as the 47th US President.
The Martin Luther King holiday contributes to a lighter economic and policy calendar in the US on Monday, allowing all eyes to focus on Trump's inauguration. The anticipation of Trump's 'blizzard' of executive orders on his first day in office adds to the tension in financial circles.