Markets set to study Trump’s first 100 days

After several weeks of eager anticipation, the event that markets have been waiting for has finally come to pass — Mr Donald Trump was formally inaugurated as the 45th President of the United States of America last Friday, heralding what may be a new world order under the watch of an unorthodox global leader.

Mr Trump’s first 100 days in office have just begun and they will be closely monitored by markets, as this period has become the measure of whether a US President’s start is successful or not, a tradition dating back to Franklin D Roosevelt’s presidency.

If Mr Trump’s first news conference since the election is any indication, we are set for exciting times ahead. Mr Trump has pledged to do quite a lot in his first 100 days, including building a wall along the Mexican border, re-assessing trade agreements to safeguard American jobs and repealing Obamacare. It remains to be seen if he will push ahead with these or backpedal on them.

What Mr Trump says in the coming week and beyond may have a significant impact on the markets. Investors will be especially interested in what Mr Trump says about China and trade matters, as they could derail the rebound in equity markets seen since the US elections.

Mr Trump aside, markets will also be keeping a close watch on US economic data to assess the strength of the US economy ahead of the next Fed policy meeting on Jan 31.

Some key data that markets will monitor include homes sales, jobless claims, fourth-quarter gross domestic product data, including the core personal consumption expenditure (PCE) figures (which the Fed uses as a measure of inflation) and durable goods orders. While the Fed is not expected to raise rates until perhaps the second quarter of this year, US data may influence what the Fed says after its end-January policy meeting.

Here in Asia, data out of China will be sparse in the coming week, with only two sets of data scheduled for release this week. In Japan, markets will also be looking out for the country’s inflation data due on Friday to see if there are improvements, as this could affect the BOJ’s policy decisions.

Overall, investors’ key focus for the week will be on developments and data in the US, which remains a key driver and source of uncertainty for markets.

Vasu Menon is Vice President and Senior Investment Strategist, Wealth Management Singapore, OCBC Bank