On 20th January, the U.S. embarked on a new chapter with Donald Trump taking the oath of office for a second term. Thierry Wizman is a global foreign exchange and rates strategist at Macquarie who pointed out that Trump’s words, whether spoken or left unsaid, could sway the markets significantly.
He explained, “Detailed policy specifics are unlikely to emerge on Monday, as that could limit Trump’s negotiating flexibility with Congress and international partners. However, the subjects he addresses and the tone he adopts could hint at immediate priorities, which traders might seize upon to guide market movements.”
Wizman has emphasized that “the focus of Trump’s inaugural address and its key points could influence yields, foreign exchange rates, and even commodity prices right from Monday.”
Trump’s actions and statements have the power to shift markets. He noted that it is especially relevant, as Trump can implement his proposals through executive orders in the early days and weeks of his administration.
Wizman has suggested that the rhetoric could lead to a drop in oil prices unless he highlights sanctions against Russia. It could bolster the dollar, especially if he reiterates his stance on immigration control and tariffs on imports.
Moreover, he indicated that Trump’s comments could push bond yields higher, especially if traders remain skeptical about the effectiveness of deficit-reduction strategies until they witness tangible results.
Despite the much-anticipated volatility, analysts of Fidelity maintain their optimism about the stocks. According to Fidelity’s director of global macro, Jurrien Timmer, increasing long-term rates could become a regular cause of market volatility in 2025. Timer in a recent research note wrote, “The market has lost momentum and breadth as prospects for more rate cuts in 2025 have dimmed. Last week, investors watched good news become bad news, as a stronger-than-expected jobs report sparked a market dip.”
Subscribe to our newsletter and get top Tech, Gaming & Streaming latest news, updates and amazing offers delivered directly in your inbox.