- Trump inauguration speech lacks detail on tariffs
- Market calm shattered by 25% Canada/Mexico tariff threats
- Bitcoin slips on zero mention about cryptocurrency future
- Gold up as much as 1% on trade war fears
- CAD, MXN and CNH worst performers in respective spaces
Markets were dished another reminder of what to expect from Trump over the next four years.
His inauguration speech covered mass deportation and plans to boost domestic oil production among other themes.
However, there was little detail on tariffs and no mention of cryptocurrencies.
Investors initially cheered after no executive orders were signed on new tariffs. But the calm was shattered after Trump threatened 25% tariffs on Canada and Mexico next week.
How have assets responded?
- Gold
The precious metal has gained as much as 1% today, fuelled by fears over Trump’s aggressive tariffs sparking a trade war.
- Bitcoin
The “OG” crypto slipped from an all-time high at $109,461.18 after Trump’s speech failed to mention anything about the future of crypto. Prices may consolidate until Trump releases pro-crypto executive orders.
- US indices
US equity futures are pointing to a positive open but there is caution still some caution in the air. There is a sense of relief that executive orders did not impose new tariffs, but Trump’s stance on Canada and Mexico could limit risk appetite.
- FX: CAD, CNH, MXN
The Canadian Dollar and Mexican peso tumbled in Asia trading after Trump’s 25% tariff threat.
Trump also signed an executive order to address unfair trade policies globally and China’s compliance.
- Canadian Dollar is one the weakest G10 currencies vs USD today
- Mexican peso is the weakest Latam currency vs USD today
- Chinese Yuan is the worst performing Asian currency vs USD today
If Trump moves ahead with the proposed tariffs on Canada and Mexico, it may impact their respective economies – potentially opening the doors to lower interest rates.
What next for markets?
Market volatility sparked by Trump may become the new normal over the next four years.
There is still some caution and questions surrounding Trump’s tariff plans.
This could present fresh trading opportunities for FX, commodity, and equity markets.
The next key date will be February 1st when 25% tariffs on Canada and Mexico are expected.
Should Trump move ahead with his plans, the dollar could rally as inflation fears return. Bets around slower Fed cuts may drag US equities lower. Tariffs on Canada and Mexico could send their respective currencies tumbling with trade fears boosting appetite for gold which is up 4% YTD.
So, keep an eye out for any fresh posts on his Truth Social platform that could offer insight
As discussed in our 2025 market outlook, global financial markets will be influenced by how Trump's policies impact the US and global economy.
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