By Tom Westbrook

A Look at Markets Ahead of Trump’s Second Term

Markets are focusing on the first hours of Donald Trump’s presidency to gauge the tone for his upcoming term. As U.S. markets close for Martin Luther King Jr. Day, attention shifts to foreign exchange markets along with stock and bond futures.

Historically, market performance during presidential terms often aligns with economic trends; however, Trump has been known to bring volatility and signify bold policy changes.

Trump, the first President since Grover Cleveland to serve two non-consecutive terms, is met with some apprehension from the markets. The dollar recently surged to multi-year highs, leading traders to wonder if it will decline should Trump adopt a cautious approach. There are ongoing debates about whether tariffs ultimately benefit or harm the dollar.

In Asia, the greenback showed signs of a slight retreat as caution prevailed.

Since mid-September, investors have shifted portfolios by selling bonds and buying dollars, anticipating that Trump’s policies may drive growth and inflation through increased tariffs, tax cuts, and immigration crackdowns. He aims to sign nearly 100 executive orders upon taking office, pledging to deport immigrants and deregulate energy resources. Notably, he had a positive conversation with Chinese President Xi Jinping prior.

Trump’s inauguration is scheduled at noon Eastern time (1700 GMT) within the Capitol, marking the first indoor event in 40 years due to cold weather.

His unpredictable nature is highlighted by his recent announcement to ‘save’ TikTok, a Chinese social media platform previously banned in the U.S. Additionally, Trump launched a digital token that initially soared but faced declines following a similar launch by Melania Trump.

Bitcoin, having risen over 45% since Trump’s election, dipped about 3% to $101,800, possibly indicating a market already pricing in high expectations.

Key Developments Influencing Monday’s Markets:

• Donald Trump presidential inauguration

(By Tom Westbrook; Editing by Edmund Klamann)