Market Relief as Trump Takes Force of the Table
- Written by: Gary Howes
Image: Pound Sterling Live.
Global stocks rose as investors gave a sigh of relief in response to President Donald Trump's address in Davos.
U.S. stocks are rising in response to U.S. President Donald Trump's committment to not use force to acquire Greenland.
His address referenced a fall in stock markets in response to rising tensions over Greenland, to which he said the "stock market is going to be doubled."
This confirms the market's health is very important to Trump and this alone will check his actions over Greenland.
He took force off the table on a number of occasions. "It's a very small ask... you can say no and we will remember."
He added:
"I am seeking immediate negotiations for the acquisition of Greenland by the United States."
"I won't use force... all the United States is asking for is a place called Greenland."
The U.S. S&P 500 is 0.35% up on the day, FTSE 100 is up 0.20% and the dollar index is now flat on the day.
The general playbook says the dollar can recover further if market confidence rises, pressuring GBP/USD lower in response.
It also hints that GBP/EUR could recover recent losses as it took a beating at the height of Greenland-induced market pulpitations.
Above: US S&P 500 is off the lows as markets see some relief in Trump's speech.
Another key takeaway is that the Davos speech was designed primarily for his domestic audience, with far more time spent on his "great" achievements in helping Americans economically.
He spent a great amount of time on pharmaceutical prices, cost of living, housing prices and general affordability issues.
"He is campaigning to his domestic audience. You can hear it in the way he uses his language and who he is trying to get this through," says Trinh Nguyen, Senior Economist for Emerging Asia at Natixis.
"Carney addressed the Davos crowd. Trump is addressing Americans, specifically the average," she explains.
