20 January 2025
Weekly Market Headlines:
- Today marks a historic moment as President Trump is inaugurated, coinciding with the US markets being closed for Martin Luther King Day. With over 200 executive orders expected, global markets could see increased volatility. Since Trump’s election, the US dollar has already shifted by 9 cents against the pound.
- Tomorrow, attention shifts to the UK with unemployment and average earnings data for the past three months. These figures could offer early signs of the Bank of England’s next steps, impacting the pound.
- Later in the week, European Central Bank President Christine Lagarde is set to speak. Her comments may provide key insights into Europe’s monetary policy plans for 2025, potentially influencing the euro.
Today marks a historic moment as President Trump assumes office, a transition likely to set the tone for global markets in the coming months. His inauguration brings with it the anticipation of sweeping policy changes, with over 200 executive orders expected to be signed. These decisions could have immediate and far-reaching implications for trade, fiscal policy, and market sentiment worldwide. The closure of US markets for Martin Luther King Day offers a brief pause before markets fully react to Trump’s first actions as President.
The US dollar’s 9-cent movement against the pound since Trump’s election highlights the sensitivity of currency markets to political developments. As his administration begins to outline its priorities, investors will be closely monitoring for signals on key areas such as tax reform, infrastructure spending, and international trade agreements. These factors could significantly influence the direction of the dollar in the days and weeks ahead.
Tomorrow, as focus shifts back to the UK, unemployment and average earnings data will take centre stage. These economic indicators not only reflect the current state of the labour market but also serve as key data points for the Bank of England’s monetary policy decisions. A strong showing could lend support to the pound, while weaker-than-expected figures might raise concerns about the UK’s economic resilience in the face of ongoing challenges.
Midweek, all eyes will turn to Europe, where European Central Bank President Christine Lagarde is set to address the economic outlook. With 2025 monetary policy under the spotlight, her remarks could shed light on the ECB’s plans for inflation control, interest rates, and stimulus measures. Any hints at policy adjustments could have a notable impact on the euro and broader market sentiment.
The week concludes with the release of PMI data from major global economies. As a vital gauge of business activity and economic performance, these reports often set the tone for market movements. A strong PMI could bolster confidence in economic recovery, while a weaker reading might prompt caution among central banks as they consider their next steps on interest rates and monetary policy.
With so many pivotal events unfolding this week, staying informed and acting strategically could make all the difference in navigating market movements.
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What’s happening this week?
GBP
- Tuesday: Unemployment &average earnings data
EUR
- Wednesday: European Central Bank President Christine Lagarde set to speak