Asian Markets Rise as Trump Tariffs Held Off
Tokyo, Japan - Tuesday, January 24, 2023 - Asian markets are poised for a positive open as President Donald Trump refrained from implementing widespread trade tariffs on his first day in office.
Key Movements:
* Australian shares advance while equity futures in Japan, Hong Kong, and mainland China indicate gains.
* US stock futures also rise after holiday market closure.
* Asian currencies strengthen as the Bloomberg Dollar Spot Index falls over 1%.
* Australian bonds rally.
Trump's Executive Orders
Upon taking office, Trump promised a series of executive orders, including a national emergency declaration at the US-Mexico border. However, the immediate executive action excludes new tariffs on the three largest US trading partners. Instead, the administration will address global trade practices more comprehensively.
Market Reaction
"The conciliatory tone between the US and China and the potential for a more measured approach to tariffs are positive for the region," said Kyle Rodda, senior analyst at Capital.com.
Investors were initially concerned about a hasty implementation of Trump's "America First" agenda, which included sweeping tariffs. Such measures had raised fears of trade conflicts and global growth disruptions.
Volatility Ahead
Despite the initial relief, market experts anticipate increased volatility going forward. "There's probably going to be greater volatility now," said Brad Bechtel, head of foreign exchange at Jefferies LLC.
Chinese Property Developers
Chinese property developers will be under focus after reports of officials intervening to stabilize operations at China Vanke Co.
Commodities
Oil prices dipped after Trump announced plans to boost domestic production and refrain from tariffs that could have restricted supplies. Renewable energy stocks, such as Siemens Energy AG and Vestas Wind Systems A/S, declined.
Wall Street Reaction
* Tom di Galoma, Curvature Securities: "Trump seems focused on the border rather than trade, which could lower yields."
* Priya Misra, JPMorgan Asset Management: "Absence of tariffs on Day 1 is positive for risk assets and negative for the dollar."
* Steve Chiavarone, Federated Hermes: "Trump's agenda is seen as pro-growth, and the focus is on tariff policy. Lack of new tariffs supports market sentiment."
Upcoming Events
Key economic events to watch this week:
* UK jobless claims and unemployment (Tuesday)
* Canada CPI (Tuesday)
* ECB President Christine Lagarde speaks at Davos (Wednesday)
* South Korea GDP (Thursday)
* Eurozone consumer confidence (Thursday)
* Japan CPI and rate decision (Friday)
* India, euro area, and UK PMIs (Friday)