- Trump Shakes Up Trading With Mixed Levy Signals: Markets Wrap
Financial markets gave a mixed verdict on US President Donald Trump’s first day in office as traders took
heart from an absence of immediate sweeping tariffs on all trade partners, while also expressing caution over
likely future measures. Chinese shares led gains in Asia after Trump at least initially opted against announcing
any new levies on the country. At the same time, the dollar rose as he said he planned to impose threatened
tariffs of as much as 25% on Canadian and Mexican imports as soon as Feb. 1. Treasuries advanced.
The limited commentary on trade restrictions so far underscores the risk of higher volatility across financial
markets as he kickstarts his second four-year term. The whipsaw trading in Asia came after US stock futures
had rallied and the dollar fell Monday when Trump had appeared to be holding off from using executive
orders to impose higher global tariffs. - Oil posts fourth week of gains as investors assess U.S. sanctions impact
Oil prices fell slightly on Friday but posted a fourth consecutive week of gains, as the latest U.S. sanctions on
Russian energy trade heightened expectations for oil supply disruptions. Brent crude futures lost 50 cents to
close at $80.79 per barrel. U.S. West Texas Intermediate crude futures dropped 80 cents to settle at $77.88 a
barrel. Oil prices gained more than 1% for the week. Last Friday, the Biden administration unveiled broader
sanctions targeting Russian oil producers and tankers. - Gold gains as dollar dips; Trump’s tariff plans in focus
Gold prices rose for a second session on Tuesday as the dollar weakened, with markets evaluating the
possible consequences of U.S. President Donald Trump’s policies in his second term after his inauguration.
Spot gold gained 0.6% to $2,724.74 per ounce by 0240 GMT. U.S. gold futures was 0.2% lower at $2,742.50.
The dollar was down about 1% after reports suggested any new taxes would be imposed in a “measured”
way. A weaker dollar makes gold more attractive to foreign buyers. - Dollar Rebounds as Trump Eyes More Canada, Mexico Tariffs
The dollar bounced back after posting its steepest drop in 14 months amid bets that US President Donald
Trump’s tariff plans would spur inflation and prevent further interest-rate cuts from the Federal Reserve.
Bloomberg’s dollar gauge rose as much as 0.7% in Asia Tuesday after slumping in New York trade as Trump
said he may enact 25% tariffs on Mexico and Canada in February. Currencies of the two nations fell more
than 1% against the greenback before paring the move. - Singapore Dollar to Weaken as MAS Pivot Comes Into Focus
Singapore’s currency weakness is likely to endure amid expectations that its central bank pivots to easing and
US tariffs ripple through the global economy. The Singapore dollar is already near a two-year low against the
greenback, and options data show trading of bearish wagers is dominating the market in anticipation of
the Monetary Authority of Singapore adjusting its stance. A majority of 17 economists in a Bloomberg survey
see a shift in stance at the institution’s upcoming decision on Jan. 24. Others see a move only later this year,
which would allow more time to see how Donald Trump retaking the US presidency plays out. - Melania Trump launches cryptocurrency ahead of Donald Trump’s inauguration
Incoming first lady Melania Trump launched her own meme coin ahead of her husband’s inauguration as
the 47th president of the United States on Monday. In a Sunday evening post on the X social media
platform, she announced that investors “can buy $MELANIA now.” The Melania token was trading at
$11.16 at 10:48 a.m. London time on Monday, up more than 50%, according to data from
CoinMarketCap. It has a market cap of $2.15 billion. Incoming President Donald Trump, who will be
inaugurated for the second time on Monday, also launched his own meme coin, a cryptocurrency that
takes inspiration from online communities and internet memes, on Friday via the Solana Blockchain
network. On Monday, the “Official Trump” coin was down 20% to trade at $53.74 at 10:53 a.m. London
time, according to CoinMarketCap. - Bitcoin touches new high of $109,000, then reverses in volatile session on Trump inauguration day
Bitcoin spiked to a new all-time high early Monday but pulled back following the inauguration of President
Donald Trump. The flagship cryptocurrency was last lower by more than 2% at $103,558.38, according to
Coin Metrics, in what appeared to be a “buy the rumor sell the news” event. Overnight, it rose as high as
$109,350.72. Bitcoin gained steam last week as traders anticipated the inauguration, viewed by many in
crypto as symbolic of a new golden era of more supportive crypto regulation in the U.S. Ahead of the event,
speculation that Trump might announce an executive order on crypto early in his new term grew. Enthusiasts
hope to see him create a crypto advisory council and establish a national bitcoin stockpile or reserve. Over
the weekend, Trump launched the “Official Trump” meme coin, which on Monday morning had risen to a
more than $10 billion market cap, according to CoinGecko. Returning First Lady Melania Trump launched her
own “Melania” meme coin Sunday. They have attracted $31 billion and $7.2 billion in trading volumes,
respectively, over the last day. - Chinese investments in the U.S. have plummeted since Trump’s first term. The trend is unlikely to
reverse
Chinese companies won’t likely step up investments in the U.S. under the incoming Trump administration,
analysts said. “That’s probably the last thing on Trump’s mind, is trying to incentivize [Chinese companies] to
invest here,” said Rafiq Dossani, an economist at U.S.-based think tank RAND. Chinese investment deals in
the U.S. have slowed drastically since Trump’s first term, according to the latest American Enterprise Institute
data. - Trump declares national energy emergency, orders U.S. to withdraw from Paris climate agreement
President Donald Trump on Monday declared a national energy emergency and ordered the U.S. to withdraw
from the Paris climate agreement, as he seeks to implement a sweeping agenda aimed at boosting fossil
production. “The inflation crisis was caused by massive overspending and escalating energy prices and that is
why today I will also declare a national energy emergency. We will drill, baby, drill,” Trump said during his
inaugural address. The president promised during his campaign to slash energy costs in half within the first
year of his administration. Trump’s declaration directed the heads of federal agencies “to identify and
exercise any lawful emergency authorities available to them” to facilitate the leasing, siting, production and
generation of domestic energy sources including on federal lands. “The national energy emergency is crucial
because we are in an AI race with China, and our ability to produce domestic American energy is so crucial
such that we can generate the electricity and power that’s needed to stay at the global forefront of
technology,” a White House official told reporters earlier Monday. Trump is abandoning the Biden
administration’s domestic and international commitments to fight climate change. The U.S. will consider its
withdrawal from the Paris climate agreement to be effective as soon as the U.N. ambassador submits
notification to the United Nations, according to the president’s executive order. The landmark international
treaty seeks to limit rising global temperatures to 1.5 degrees Celsius. Trump also signed orders to revoke
former President Joe Biden’s actions that barred oil and gas drilling in large swathes of the Arctic and in U.S.
coastal waters, a move that will likely be contested in court. He also repealed Biden administration goals for
half of all new car sales to be zero-emission vehicles by 2030, to achieve a carbon-free electricity sector by
2035, and to achieve net-zero emissions no later than 2050. - Santander weighs UK market exit amid banking challenges
Santander UK, the subsidiary of Spanish multinational financial services company Banco Santander, is
considering a strategic review that may lead to its exit from the UK market, reported Financial Times.
The banking major is said to be reconsidering its UK presence 20 years after its acquisition of Abbey National.
This revelation comes as the Spanish bank grapples with lower returns and legal challenges within its UK
operations. The bank’s UK operations have also not benefited as much from rising interest rates compared to
other markets, the news publication added. A former executive mentioned that the sale of the ringfenced
bank has “always been a possibility” for executive chair Ana Botín. No deal or announcement was imminent
and that the review was at an early stage, the news publication added. The bank’s UK presence in the retail
banking market began with the 2004 purchase of former building society Abbey National and expanded
during the financial crisis with further acquisitions. It rebranded the combined entity as Santander UK in 2010.
The bank’s review includes a focus on growth regions such as the US, with recent expansions in
corporate and investment banking. Despite the potential retail and commercial banking exit, Santander is
expected to maintain its corporate and investment banking operations in London. - TikTok gets reprieve with Trump order but with twist
President Donald Trump signed an executive order on Monday seeking to delay by 75 days the enforcement
of a ban of popular short-video app TikTok that was slated to be shuttered on Jan. 19.
But while signing the order, Trump suggested that the United States government should be a half owner of
TikTok’s U.S. business in return for keeping the app alive. He warned that he could impose tariffs on China if
Beijing failed to approve a U.S. deal with TikTok. The short video service used by 170 million Americans was
briefly taken offline for U.S. users on Saturday, just before a law that said it must be sold by its Chinese owner
ByteDance on national security grounds, or be banned, took effect on Sunday. U.S. officials had said that
under ByteDance, there was a serious national security risk of Americans’ data being misused. TikTok
restored access on Sunday and thanked Trump for providing assurances to TikTok and its business partners
that they would not face hefty fines to keep the app running. The app and website were operational on
Monday, but TikTok was still not available for download in the Apple (NASDAQ:AAPL) and Google app stores.
Trump’s order, signed hours after he was inaugurated on Monday, directs the attorney general to not
enforce the law “to permit my administration an opportunity to determine the appropriate course of action
with respect to TikTok.” - TSMC is confident its CHIPS Act funding will continue under Trump, says CFO Wendell Huang
U.S. President-elect Donald Trump has accused Taiwan of “stealing” his country’s chip industry. But Taiwan’s
biggest chip company is confident the Trump administration will continue funding its projects in the U.S.
Taiwan Semiconductor Manufacturing Co has been promised $6.6 billion under the Joe Biden
administration’s CHIPS and Science ACT to help build three cutting-edge chip fabrication plants in Arizona as
part of U.S. efforts to onshore chip manufacturing. Speaking to CNBC’s Emily Tan in an exclusive interview,
TSMC Chief Financial Officer Wendell Huang said the funding was expected to continue to roll in gradually
under Trump as the fabrication plants pass construction and production milestones. “As a matter of fact, in
the fourth quarter, we already received the first batch of government support,” Haung said, revealing the
contract chip manufacturer had got $1.5 billion in funds. Following some production delays, the first
fabrication plant in Arizona started producing advanced chips in the fourth quarter of last year, Huang
said. He added that the construction of two plants in Arizona was on track, with the second expected to
be operational in 2028. TSMC’s first investment in Arizona was announced in May 2020, with the company’s
total investment in the its three projects there eventually standing at over $65 billion.
