A short day on FOREX, despite a return to normal activity after a 3-day 'bridge': the foreign exchange market was closed yesterday in the US due to the Martin Luther King Day weekend.

Spreads against the Dollar are barely measurable this evening against the Yen and the Pound, with zero variation against the Swiss Franc and a 0.15% rise in the Euro against the $ towards 1.0430.
But the session was in fact more volatile than it seems, with an initial pullback in the Euro to around $1.0345... and the biggest gap materialized against the Canadian dollar, which fell -1.4% to around 1.4525 before recovering to 1.4325 (fears of 25% tariffs on Canadian imports, but 10 days left to 'discuss').

Donald Trump's inaugural speech did not contain any precise indications of the increase in import taxes (deemed inflationary), but a rate of 25% is indeed expected to be applied against Canada and Mexico on February 1.

He did, however, unsurprisingly promise to put America first and to pursue a policy of deregulation that should boost corporate profits.

Investors have remembered that his first presidency was marked by high volatility in financial assets, but above all by a 68% rise in the S&P 500", points out Christopher Dembik, Investment Strategy Advisor at Pictet AM.

On the macro front, the first US statistic on Tuesday was the Philly-FED manufacturing activity index, which fell to -9.1 from -3.4 in December.

In Europe, financial market experts' "economic sentiment" for Germany deteriorated in January, according to the ZEW outlook index, which fell by -5.4 points to +10.3.

This could be explained, among other things, by the recently published negative GDP growth figures and increasing inflationary pressures", explains ZEW Institute President Achim Wambach.

However, financial market experts' assessment of the current economic situation in Germany changes only slightly, with the corresponding index rising by 2.7 points to -90.4.

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