Markey wrap: markets are awaiting Trump’s inauguration and speech - Westpac

Analysts at Westpac offered a market wrap.

Key Quotes:

"Global Market Sentiment: Markets are awaiting Trump’s inauguration and speech. USD and US yields display solid support after Philly Fed’s business survey affirmed the broad strength in yesterday’s Fed’s Beige Book. Draghi stated that ECB will look through near term inflation pick-ups whilst UK’s May made another positive speech in Davos, stressing UK’s desire to be a global trading partner and offering conciliatory comments to EU. Stocks drifted slightly lower on the day.

Currencies: EUR/USD (1.0630) lost its pre-ECB bid (hit 1.0675) on Draghi’s comments whilst GBP/USD (1.2310) firmed on May’s speech. JPY remained the weakest major currency with USD/JPY (115.25) bid through the EU trading day. AUD/USD (0.7545) and NZD/USD (0.7170) remained firm but off recent highs.

Interest rates: US data added to the already rising profile for US yield: 10yr rose +5bps to 2.47%. Spreads to EU widened as 10yr bunds (37bps) backed away from testing 40bps after ECB accommodation was underscored."