Markets adjusted to Trump’s big presidential win last week. Stock markets rose and inflation expectations jumped (good for commodities) but the U.S. dollar rose to new four-month highs (bad for commodities). Trump’s inauguration is January 20th; traders will spend the next 10 weeks looking for specifics around his new policies (tariffs, taxes, labor, dollar …).
We’ll see CPI inflation data on Wednesday. The market expects a slight uptick to 2.6% y/y versus 2.4% last month. The Fed just cut -25 bps last Thursday and Powell’s message was balanced. This week’s inflation stats will shift the narrative and determine the next direction for the strong dollar and commodities in general.
