Markets Await Trump Inauguration Tonight

AUD

The AUD opens mixed across the board as markets await President-Elect Trump's inauguration, about 18h away. Asian equities closed Friday mixed, the Nikkei -0.3%, and the Hang Seng and Shenzhen up +0.3%. The ASX drifted -0.2% on the back of a -1.0% slide in financials. GDP q/y showed China’s economy expanded 5.4%, exceeding expectations of 5.0%. This is largely due to stimulus measures in order to meet Beijing’s growth target. Industrial Production also showed positive growth at 6.2% y/y. Today, China will announce the one and five-year Loan Prime Rates which are expected to hold at 3.10% and 3.60%. No Aussie data until Wednesday where we will see the MI leading index.
 

USD

AUDUSD peaked at 0.6227 in the early hours on Saturday before slowly declining over the weekend to open at 0.6197, with the USD firming ahead of Trump's inauguration. Another strong session on Wall St. saw the Nasdaq close +1.5%, the S&P 500 +1.0%, and the Dow Jones +0.8%.  It was also a quiet past couple days for US data with only Building Permits released on expectations at 1.48 million. There is no major US data until Friday, with all eyes on Trump's inauguration in about 18h. The US dollar has strengthened over the past couple of months on expectations that Trump will introduce inflationary policies. Further currency volatility is expected if his words or actions don’t line up with current expectations.
 

EUR

AUDEUR opens flat at 0.6034 with little major European data released over the past few days. In terms of equities, DAX came in at 1.2% with CAC coming in at 1.0%. The next Euro data release will be tomorrow with the German ZEW Economic Sentiment. This week, the World Economic Forum is underway in Davos where nearly 3000 leaders, including 60 heads of state and government will be attending. Donald Trump, Global War & Artificial Intelligence are expected to dominate discussions.
 

GBP

AUDGBP opens higher this morning at 0.5078 with the pair experiencing some volatility over the last 48 hours. The Pound weakened on Friday when UK Retail Sales fell short of expectations, having declined 0.3% in the last month. The disappointing retail data has upped bets on the extent of Bank of England rate cuts this year. The FTSE came in at 1.4% on Friday. Today, the HPI will give insight into UK House Price Inflation. Tomorrow's important jobs data will also play a big role in determining what the Bank of England will do next.
 

NZD

AUDNZD opened slightly higher at 1.1087 after touching lows of 1.1066 on Friday night. On Friday, the BuisnessNZ Manufacturing Index showed the NZ manufacturing industry is still contracting, although at a slower pace. On Tuesday we will get the same data but for the services sector.