Global markets greeted Donald Trump’s presidency with apprehension on Tuesday in moves that were highly sensitive to headlines over the newly sworn-in president’s plans for trade relations and tariffs in particular. U.S. markets were closed for a holiday on Monday, so the first reactions to Trump’s return to the White House were felt during Asian trade on Tuesday, with European futures also pointing to a lower open. Just as investors cheered the possibility of a delay in Trump’s implementation of tariffs following a brief mention of the topic in his ...

While the Federal Reserve is expected to keep interest rates unchanged next week, there is uncertainty about what it will do eight-and-a-half weeks into Donald Trump’s second term as U.S. president. Sixty-one out of 103 economists think the Fed will reduce rates on March 19, according to a Reuters survey published on Friday. The dollar might cede some of its gains since Trump’s November presidential election victory if the 61 are right. A Fed rate cut in March would almost certainly be welcomed by Trump, although markets currently see a ...

Bond vigilantism has returned to Britain, raising the prospect that the government will be forced to consider politically toxic tax rises or public spending cuts to placate investors concerned about the country’s fiscal health. But Chancellor of the Exchequer Rachel Reeves could also get a helping hand from the Bank of England’s balance sheet. In the first weeks of 2025, certain gilt yields spiked to highs last seen in 2008. While yields have since come off these highs, following softer-than-expected December inflation data, it is fair to assume the UK ...

Investors prepared to welcome Donald Trump’s second inauguration, anticipating benefits from his pro-business agenda, while remaining wary of his protectionist trade policies, particularly his stance on tariffs. Trump enters office with an ambitious agenda spanning trade reform, immigration crackdowns, tax cuts and loosening cryptocurrency regulation. Investment managers are adjusting portfolios across asset classes, watching his inaugural address for signals that could trigger near-term market moves. “Uncertainty remains the watchword, with everyone alert for answers to questions like whether the threat of tariffs will become a reality or remain a negotiating ...

The dollar drifted lower and stocks were cautiously positive on Monday as investors waited for an expected flurry of policy announcements in the first hours of Donald Trump’s second presidency and eyed a rate hike in Japan at the end of the week. Trump takes the oath of office at noon Eastern Time (1700 GMT), and promised a “brand new day of American strength” at a rally on Sunday. He has stoked expectations he will issue a slew of executive orders right away and, in a reminder of his unpredictability, ...

MSCI’s global equities index rose on Friday while U.S. Treasury yields turned higher with the dollar as upbeat economic data and earnings appeared to help investors shrug off any jitters ahead of the U.S. presidential inauguration. The U.S. dollar strengthened against major peers after four days of declines, while benchmark U.S. Treasury yields – after a three-session drop – hit a two-week low before reversing course. Federal Reserve data on Friday showed U.S. manufacturing output increased 0.6% last month after an upwardly revised 0.4% rebound in November, likely as production ...

Japan: BoJ rate decision is a close call – but we expect a rate hike The highlight of the week is the Bank of Japan’s meeting on 24 January. Recent inflation and wage data have been encouraging and support the Bank of Japan’s decision to raise interest rates at next week’s meeting. Latest comments from Bank of Japan officials have also shown increased confidence in sustainable wage growth. But, we should closely watch Trump’s inauguration which should deliver a negative impact on the global and Japanese economy. Japan will release ...

Asian debt markets saw foreign outflows in December, for the second month in a row, reversing strong demand from earlier in 2024 on anticipated higher U.S. tariffs under President-elect Donald Trump, slower easing by the Federal Reserve, and reduced regional growth expectations. Cross-border investors sold a net $3.07 billion worth of bonds in Indonesia, Thailand, Malaysia, India and South Korea last month after about $2.12 billion worth of net selling in Nov, data from regulatory authorities and bond market associations showed. Reuters Graphics Reuters Graphics Thomson ReutersMonthly foreign investment flows: ...

Demand for global equity funds declined sharply in the week through Jan. 15, as U.S. Treasury yields rose and expectations for the Federal Reserve’s interest rate cuts fell following a robust jobs report. Global equity funds witnessed just $37.79 million worth of net purchases during the week, the smallest weekly buying since Dec. 18, 2024, as per LSEG Lipper data. Last week, investors pondered possibility that the Fed may have finished cutting rates as data from the Labor Department showed U.S. job growth accelerated in December, while the unemployment rate ...

Financial markets are betting China will not use the yuan as a policy tool to offset expected U.S. tariffs in a second Donald Trump presidency, based on a view that sharp depreciation like that seen in his first term will be more harmful than helpful to the struggling economy. From the pricing of yuan forwards to interest rate derivatives and analysts’ forecasts, indications are that China is already permitting a slow depreciation of the yuan to adjust to a broadly stronger dollar as it braces for Trump 2.0. But pricing ...

US markets are set to be in a state of limbo next week, but we’ll find out if Europe’s economy is recovering or not; don’t hold your breath. Watch out for quite a few releases across central Europe as the world waits for Donald Trump’s inauguration on Monday THINK Ahead in developed markets United States (James Knightley) It is a quiet week in the US with no major data reports of note and the Fed’s external communication blackout kicking in on Monday. As such, the markets will be in limbo ...

Investors who had been enjoying a brief rebound in long-suffering UK markets are hunkering down for a stretch of losses as ructions in the pound, government bonds and stocks feed on each other and put Britain at risk of a wave of hedge fund attacks. As global borrowing costs rise in a trend led by the U.S. Treasury market, the UK’s high-debt, low-growth economy that just months ago appeared to be shrugging off years of post-Brexit gloom is now viewed as vulnerable to capital flight. Traders now expect months of ...

U.S. equity funds saw a spike in outflows for the week ending Jan. 15, as the outlook for Federal Reserve rate cuts this year had dimmed while investors were cautious about the ongoing quarterly earnings season. According to LSEG Lipper data, investors withdrew a sharp $8.23 billion from U.S. equity funds during the week on top of a net $5.01 billion worth of sales in the prior week. U.S. shares rose after a lower-than-expected core inflation reading and strong financial results from firms like JP Morgan JPM and Goldman Sachs ...

Asian stocks edged up on Friday, drawing support from unexpectedly strong growth in China’s economy at the end of last year, although gains were limited by caution ahead of Donald Trump’s inauguration as U.S. president next week. Japanese equities struggled though, with the Nikkei on course for a third straight losing week, after the yen popped to a one-month high amid rising bets for an imminent Bank of Japan rate hike. The dollar clawed back some of Thursday’s steep declines against major peers, the result of resurgent wagers on a ...

Asian hedge funds delivered their strongest returns in 15 years last year, capitalising on market volatility, winners in China’s wobbly economy and opportunities in artificial intelligence (AI). The HFRI Asia with Japan Index, which tracks hedge funds that mainly invest in the region, rose 12.1% last year – its best annual growth since 2009. HFR is one of the largest global hedge fund data platforms. 2024 was a volatile year for most investors amid capital flows from the region into stronger dollar assets, deflation risks in China, and a massive ...