“Building the wall on the border with Mexico…”

US

President Donald Trump has acted on the two most controversial elements of his campaign that of building the wall on the border with Mexico which could cost $15 billion and tighten the restrictions of who can enter the US. The building of the wall across the border has created a diplomatic storm with the Mexican President Enrique Pena Nieto cancelling plans to meet Donald Trump. The plans to build a Mexican border is boosting the prospects of builders and material suppliers amongst which are Cemex SAB, HeidelbergCement, Nebraska’s Werner Enterprises Inc and LafargeHolcim Ltd. Equipment makers such as Caterpillar Inc and Titan International Inc should also benefit in view of the heavy machinery and the tires for heavy equipment needed.

In line with the president’s comment to add more jobs in the US from automakers to technology, an execution order was drafted aimed at overhauling the work visa programs on which technology companies depend on when recruiting employees each year. The new president has tackled immigration, banning refugees and travelers from seven predominantly Muslim Countries. This move has unsettled markets.

UK

Theresa May was the first foreign leader to meet Donald Trump at the White House since he took office. Her aim is to seek agreement with Trump on a trade deal which will be formalized once Britain has completed Brexit. The relationship with the US is important for post Brexit.

Turkey

The central bank of Turkey raised the overnight lending interest rate and would take further measures to bolster the lira and contain inflation level. The monetary Policy committee raised the overnight lending rate to 9.25% (an increase of 75 basis points). The one week repo rate and the overnight borrowing rates were kept unchanged at 8% and 7.25% respectively. The one week repurchasing rate and the overnight borrowing rates were kept unchanged at 8% and 7.25% respectively. The committee decided to strengthen the monetary policy to contain the deterioration in the inflation outlook. Should the need arises further tightening will be delivered.

Commodities

There is increased appeal for gold as a safe-haven asset and the price jumped above $1,200 an ounce heading for the best month since June due to the actions of Donald Trump since he took office as president. Investors felt unease after Donald Trump fired the acting Attorney General Sally Yates after she refused to uphold an order banning some immigrant travel.

Japan

The Bank of Japan decided to keep its key policy and inflation forecasts unchanged as it waits to see the impact of a recent decline in the yen and the policies of the Trump’s administration. Japan is still far from the 2% inflation target. The yen’s recent decline against the dollar has reduced pressure on the central bank to increase stimulus because the drop in the currency will increase inflationary pressures and make exports more competitive. BOJ is monitoring the developments and details of the new economic policies in the US, which currently are still unclear.

Other

The Federal Reserve holds a policy meeting on 01st February 2017, while China manufacturing and services industry data are scheduled on same day.

On the 3rd February the first US jobs report of the year are due.

Amongst the major US companies due to report results this week are Apple Inc, Facebook and Amazon.com Inc.

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