“The people who live in a golden age usually go around complaining how yellow everything looks.”
— Randall Jarrell
Enjoying The QuiCQ but not yet signed up for The Quotedian? What are you waiting for?!!
Welcome to the new Golden Era of …. the QuiCQ, where we will not leave a stone unturned to discover what is going on in the different asset classes on a daily basis (but hopefully never in a TL;DR format).
Having said that, the unturned stones today are rather pebbles. Yes, yes, a lot going on with Trump being inaugarted and launch a missile attack of executive orders out into the world. But this is not a political blog (quite the contrary at such), and to measure market impact of forementioned exec orders it is probably still a bit early days.
Nevertheless, futures markets were open as was the currency market, so let’s do a speed round across asset to see if anything is of mention.
Starting with the S&P 500 (futures) we note a sharp rise pre-inauguration, followed by an ever sharper drop at about 1 am CET:
That late drop is probably easily explained when overlaying a US Dollar chart. Let’s use the chart of the US Dollar versus the Canadian Dollar as a not so random choice:
Hence, the explanation for the drop in the equity futures, and the CAD is that at that time, Trump confirmed (but did not sign) 25% tariffs on the USA’s neighbours to the North and the South.
Hence, if we add the Peso to the mix, we get a similar outcome:
Bond yields softened during the entire day, with an accelerated drop coinciding with the Mexico/Canada rhetoric:
Oddly enough, apparent public enemy #1 (China) got very little mention during Trump’s inaugaral speech. John Authers at Bloomberg made a good briefing in those regards:
“Parsing the inaugural address, Trump’s geographic priorities did look bizarre. China only came up twice (in complaints over the Panama Canal). Canada wasn’t mentioned at all, nor was Europe. Mexico came up only in connection with renaming the Gulf of Mexico. Those are the four biggest US trading partners. Mars, however, got a mention. And Panama beat them all:”
Another asset class in focus where cryptocurrencies, where disappointed (or profit taking) seemed to settle in after a few sessions of increasing FOMO. Here’s Bitcoin over the past 24 hours or so:
Roundtrip nearly complete!
Let’s cut it short here today - back tomorrow, so make sure to stay tuned!
André
US Total Trade:
US largest deficit: