A defensive consolidation in risk markets - ANZ

Analysts at ANZ said that overnight, there was a defensive consolidation in risk markets as investors continue to assess first impressions of the new Trump Presidency and want clarification on trade policy, proposed tax cuts and infrastructure spending.

Key Quotes:

"The interesting observation is that markets did not respond positively to re-affirmation of lower taxes and looser regulation, reinforcing the impression that all the good news is discounted for now. As week one in office gets underway there is a growing sense of skepticism, not helped by the tone of Friday’s inaugural address and subsequent spat with the media. Within developed markets, there was a mild bias for safe haven FX as the USD remained defensive, the VIX ticked up and equities were under pressure.

USD/JPY remained heavy, and at the margin is contributing to positive sentiment towards Asian FX. The major US stock indices were down 0.3-0.5% and European stocks declined 0.6-0.8%. Sovereign bond yields fell and curves flattened. US 10-year fell 7bps to 2.40%. Commodity price movements were mixed. Oil was under moderate downward pressure, with WTI falling around 0.4% to $53/bbl."