Bloomberg Surveillance Foreign Exchange and Equities in Trump's First Week
Jan 24, 2025
In the first week of the second Trump administration, the dynamics of foreign exchange are explored, with a spotlight on the US and Canadian dollars. The discussion shifts to market sentiment, examining the influence of tariffs on trading behavior and the intricacies of the Federal Reserve's policies. Insights on inflation trends emerge, alongside a dive into corporate language critique. Meanwhile, there's a quirky exploration of yak wool's rise and the booming luxury real estate market in D.C., marked by high-value sales and unexpected technology trends.
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US-Canada Trade
- The U.S. runs a trade surplus with Canada if oil and gas are excluded.
- The economic impact of tariffs on Canada would be larger than on China due to Canada's ability to retaliate.
Tariff Timing
- The timing of tariff announcements significantly impacts the market.
- The market reacts to the anticipation and implementation of tariffs, influencing risk premiums and currency valuations.
Trader Positioning on Tariffs
- Traders position themselves in the currency market based on the perceived risk of tariffs.
- Currently, the market may be underpricing the potential extent of future tariffs.
