Small day on FOREX, despite a resumption of normal activity after 3 days of ‘bridge’: the foreign exchange market was closed yesterday in the US due to the ‘Martin Luther King Day’ weekend.
The differences against the Dollar are barely measurable this evening against the Yen and against the Pound, zero variation against the Swiss Franc and an increase of 0.15% in the Euro against the $ towards 1.0430.
But the session was in fact more volatile than it seems with an initial decline in the Euro to around $1.0345… and the biggest gap materialized against the Canadian $ which fell by -1.4% to around 1.4525 before recovering towards 1.4325 (fears of 25% customs duties on Canadian imports, but there are 10 days left to ‘discuss’).
Donald Trump’s inauguration speech did not contain precise indications on the increase in import taxes (considered inflationary) but we are in fact expecting a rate of 25% applied against Canada and Mexico in February 1.
On the other hand, he promised, unsurprisingly, to put America first and to pursue a policy of deregulation which should boost corporate profits.
‘Investors have remembered that his first presidency was marked by high volatility in financial assets, but above all by a 68% increase in the S&P 500,’ recalls Christopher Dembik, investment strategy advisor at Pictet AM.
On the ‘Macro’ side, there was a first statistic in the United States this Tuesday: the ‘Philly-FED’ index of manufacturing activity fell to -9.1 compared to -3.4 in December.
-In Europe, the ‘economic sentiment’ of financial market experts for Germany deteriorated in January, according to the ZEW outlook index which fell by -5.4 points to +10.3.
‘This could be explained, among other things, by the recently published negative GDP growth figures and the increase in inflationary pressures,’ explains the president of the ZEW institute, Achim Wambach.
However, the assessment of the current economic situation in Germany by financial market experts only changes slightly, with the corresponding index increasing by 2.7 points to now stand at -90.4.
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