Inauguration day

Today's Highlights

• Inauguration day

• China growing quite nicely

• UK retail sales expected to be strong

• Canada inflation forecast to pick up

Current Market Overview

I saw a post on Facebook this morning which read, ‘Don’t forget to turn your clocks back 300 years tonight.’ Yes, it has arrived…the day I predicated would never come; the day Donald Trump is sworn in as President of the United States of America. Interesting that the last words in Trump’s speech yesterday were ‘enjoy the fireworks.’ In the immortal words of Del Boy Trotter, “Brace yourself Rodney.”

The markets have been pretty sanguine about it but we will see if and how that changes as Mr Trump’s protectionist policies start to unfold. The US Dollar is a tad weaker as we head into this momentous day - or did I mean infamous?

There is other news by the way. UK Prime Minister Theresa May is making a good fist of presenting the UK as outward looking at a time when the US is being urged to be more insular. Her performance at Davos yesterday was widely praised but the detail starts next week when the Supreme Court will rule on whether the Prime Minister can instigate Article 50 or has to get permission from MPs to do so. Then we have to wait for the starting gun to fire on EU exit negotiations and the start of all the speculation that will flow like an untamed lava stream down a grease-slicked mountain from news agencies everywhere.

For the time being, the strength of UK data is maintaining the Pound at acceptable levels and there are clearly plenty of GBP buyers around USD 1.20 and EUR 1.15.

Overnight news included Chinese Gross Domestic Product growth data. No one really believes the individual data from China but there are trends and the trend for China’s growth is a positive one. The Chinese authorities claim the data is authentic although they do admit to cooking the books between 2011 and 2014. So influential is the Chinese demand for commodities and so important is China’s success as a bellwether for the global economy that it would be good if they were now being honest.

This morning brings the UK retail sales data for December. We expect the numbers to be very positive; so there is scope for the Pound to make further gains but we know that isn’t the only influence on Sterling at the moment. 

This afternoon brings Canada’s inflation data and that too should be a positive report. Higher energy costs are lifting inflation across the globe but Canada is a producer, so the effect is a tad less dramatic than it is for a large scale importer of commodities like China for example.

As we head into the weekend, a little known US TV show has emerged. It was aired between 1957 and 1959 and was called ‘Trackdown’. One episode featured a conman who convinced everyone he could save them from the end of the world by building a wall. His name was Mr Trump. Any similarities to anyone by the same name, either living or dead are purely coincidental.