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CNN, citing sources, reports that Trump will pardon those convicted of non-violent crimes in the Jan 6 attack on the Capitol and those convicted of more-serious crimes will have their sentences commuted.

I don’t think is a surprise and it’s certainly no market moving.

This article was written by Adam Button at www.forexlive.com.

There has been considerable hand-wringing about Treasury yields in the run-up to the election. I believe it became increasingly clear that the angst is more about deficits than inflation. Breakevens have remained rangebound even as nominal yields rose.

A big part of the move is better growth and expectations of growth as well.

Certainly some of it has been deficits, in part because a Republican priority will be extending hugely-expensive Trump tax cuts and perhaps even deepening them and re-introducing SALT deductions.

None of that changed today but the big news is that Trump didn’t initiate any kind of trade war. He continued to promise tariffs in his inaugural speech but is first executive order on that front was only to investigate trade practices, including those of China, Mexico and Canada.

The market took at that as a sigh of relief and I suspect we will see lower Treasury yields when bond markets re-open. Already, we see 1-2 bps lower 10s in Canada and Europe.

The big reason is that trade wars are like real wars — expensive. If we were to get big US tariffs and big retaliation from trading partners, then governments would respond with more spending. Instead, early indications are that Trump will look to negotiations first.

Obviously, everything is subject to change with Trump and nothing is set in stone but it’s going to ‘one day at a time’ for four years, just like the first time.

This article was written by Adam Button at www.forexlive.com.

One report says that the wallet that bought $1,000,000 worth of $TRUMP at 18-cents has transferred his tokens to other wallets and completely exited his positions following $TRUMP ‘s listing on Robinhood. The buyer netted a profit of over $300 million.

The memecoin is now quoted at $36.22, down 29% today as one of the all-time grifts unfolds.

Bitcoin is at the lows of US trade at $101,800.

This article was written by Adam Button at www.forexlive.com.

No surprise from Trump so far:

• I was saved by God to Make America Great Again
• We will drill, baby, drill
• We will fill strategic reserves again and export American energy all over the world
• Will begin overhaul of trade system
• Will tariff and tax foreign countries to enrich our citizens
• Will establish ‘external revenue service’
• Will declare national energy emergency
• Will send troops to the southern border

The bolded headline has caused some US dollar buying and selling in risk assets.

This article was written by Adam Button at www.forexlive.com.

Here is the document’s full text:

MAKE AMERICA SAFE AGAIN

• President Trump will take bold action to secure our border and protect American communities. This includes ending Biden’s catch-and-release policies, reinstating Remain in Mexico, building the wall, ending asylum for illegal border crossers, cracking down on criminal sanctuaries, and enhancing vetting and screening of aliens.

• President Trump’s deportation operation will address the record border crossings of criminal aliens under the prior administration.

• The President is suspending refugee resettlement, after communities were forced to house large and unsustainable populations of migrants, straining community safety and resources.

• The Armed Forces, including the National Guard, will engage in border security, which is national security, and will be deployed to the border to assist existing law enforcement personnel.

• President Trump will begin the process of designating cartels, including the dangerous Tren de Aragua, as foreign terrorist organizations and use the Alien Enemies Act to remove them.

• The Department of Justice will seek the death penalty as the appropriate punishment for heinous crimes against humanity, including those who kill law enforcement officers and illegal migrants who maim and murder Americans.

MAKE AMERICA AFFORDABLE AND ENERGY DOMINANT AGAIN

• The President will unleash American energy by ending Biden’s policies of climate extremism, streamlining permitting, and reviewing for rescission all regulations that impose undue burdens on energy production and use, including mining and processing of non-fuel minerals.

• President Trump’s energy actions empower consumer choice in vehicles, showerheads, toilets, washing machines, lightbulbs, and dishwashers.

• President Trump will declare an energy emergency and use all necessary resources to build critical infrastructure.

• President Trump’s energy policies will end leasing to massive wind farms that degrade our natural landscapes and fail to serve American energy consumers.

• President Trump will withdraw from the Paris Climate Accord.

• All agencies will take emergency measures to reduce the cost of living.

• President Trump will announce the America First Trade Policy.

• America will no longer be beholden to foreign organizations for our national tax policy, which punishes American businesses.

DRAIN THE SWAMP

• The President will usher a Golden Age for America by reforming and improving the government bureaucracy to work for the American people. He will freeze bureaucrat hiring except in essential areas to end the onslaught of useless and overpaid DEI activists buried into the federal workforce. He will pause burdensome and radical regulations not yet in effect that Biden announced.

• President Trump is announcing an unprecedented slate of executive orders for rescission.

• President Trump is planning for improved accountability of government bureaucrats. The American people deserve the highest-quality service from people who love our country. The President will also return federal workers to work, as only 6% of employees currently work in person.

• President Trump is taking swift action to end the weaponization of government against political rivals and ordering all document retention as required by law. President Trump is also ending the unconstitutional censorship by the federal government. No longer will government employees pick and require the erasure of entirely true speech.

• On the President’s direction, the State Department will have an America-First foreign policy.

BRING BACK AMERICAN VALUES

• The President will establish male and female as biological reality and protect women from radical gender ideology.

• American landmarks will be named to appropriately honor our Nation’s history.

This article was written by Adam Button at www.forexlive.com.

Donald Trump has officially become President of the United States for the second time, after taking the oath of office.

He is the 47th President.

Punchbowl News is also reporting that Trump will withdraw from the Paris Climate Accord as one of his first acts. That’s no surprise.

This article was written by Adam Button at www.forexlive.com.

Closing changes for the day:

• Stoxx 600 +0.1%
• German DAX +0.5%
• France CAC +0.3%
• UK FTSE 100 +0.2%
• Spain IBEX +0.3%
• Italy’s FTSE MIB -0.2%

The moves today were relatively modest but highlight optimism that Trump won’t impose tariffs.

This article was written by Adam Button at www.forexlive.com.

The Canadian dollar has been a big mover today, trading in a 220 pip range. The pair rose to the highest of the year earlier at 1.4485 on fears that Trump would enact Day 1 tariffs on Canada of up to 25%, sparking retaliation and a trade war.

However a WSJ report highlighted that Trump will only sign a memo asking to investigate trade practices from Canada, Mexico and China. That’s the best-case scenario so far, though with Trump everything is subject to change.

In light of the report, USD/CAD fell sharply and hit 1.4262 at the low. That’s back to December 17 levels, though the pair has since bounced to 1.4327.

Part of the reason for the bounce is uncertainty about what’s really coming. Canada and others won’t avoid a trade dispute for four years so it’s tough to embrace it or any other currencies that are in the crosshairs. That said, it’s a great start.

Also restraining the loonie here is a $1.42 drop in WTI crude to $76.46. Oil has been building in a tariff premium as buyers stuff pipelines and tankers trying to get ahead of potential tariffs. There was also some threat of Canada and/or Mexico cutting off supplies in response to tariffs.

As for what’s next, we wait for the next Trump headlines but I think it’s a good sign of an interim bottom for the loonie. Trump had months to think about tariffs on Canada and I don’t think he’s going to change his mind tomorrow (though the threats will continue).

This article was written by Adam Button at www.forexlive.com.

Stanley Druckenmiller is on CNBC at the moment saying he doesn’t have a strong opinion on the direction of the market but with innovation surging he said it’s time to focus on individual stocks.

• The economy is ‘very interesting’
• We’re going from the most anti-business administration to the opposite
• CEO’s are somewhere between ‘relieved and giddy’
• The economy looks very, very strong at least for the next six months
• I would say the market is ‘complicated’ despite economy
• There is a push of a strong economy against bond yields that makes me not have a strong opinion on the market

More to come.

This article was written by Adam Button at www.forexlive.com.

A Reuters report citing a ‘Trump official’ confirms the earlier WSJ report that the President-elect won’t impose tariffs today and instead will issue a memo to study trade practices.

The earlier report sparked some big market moves.

This article was written by Adam Button at www.forexlive.com.

US equity markets won’t open today due to the MLK holiday but indications are good for tomorrow with S&P 500 futures up 29 points.

Futures were lower before the report saying that Trump won’t impose tariffs today but instead will issue a memo to study trade practices.

If anything, I suspect this 0.5% move is much too small for the news. That said, it only takes a quick denial from Trump to reverse this, which is what the market is worried about.

This article was written by Adam Button at www.forexlive.com.

I’ve been writing about this since the election and it’s worth repeating now.

Trump’s economic campaign was on three things:

1. Boosting the stock market
2. Narrowing trade deficits via tariffs
3. Narrowing fiscal deficits

Those three goals are incompatible.

I have emphasized that the way to trade Trump is to believe that the stock market (and GDP growth) will be the real priority, at the expense of the other two. There will be incredible noise around those other priorities but he’s not going to spark some kind of trade war that hurts stock markets badly, nor will he cut the deficit in a way that weakens growth.

I have high conviction on that, or at least as high as you can have with anything to do with Trump.

Today’s report saying he will only issue a ‘memo to investigate’ US trade deficits is a big sign that line of thinking is right. There have been some big moves in FX markets on the headlines and that’s the right move. Now there is going to be some kind of denial and the sound-and-fury will return because the threat of tariffs is far less-costly than actually employing them.

But actions speak far louder than words and if Trump really wanted to impose tariffs and negotiate later, today was the day to do it.

The market is figuring that out and it’s good for global growth that the global trading order will be preserved, for now. He doesn’t even appear to be going after China, let alone Canada, Mexico and Europe.

The euro is up 121 pips now as part of a broad USD move.

This article was written by Adam Button at www.forexlive.com.