ON DECK FOR MONDAY, JANUARY 20
KEY POINTS:
- Markets are dead quiet, but don’t get used to it
- MLK Jr Day has US markets shut for Inauguration Day
- Trump’s weekend rally speech was classic Trump
- Executive orders will start flying shortly after 12pmET…
- …with the key being tariffs—and the responses
- BoC to release stale surveys
- Reminder: Global Week Ahead—Nobody’s Victim (here)
It’s very quiet, but that will probably change in a few hours. MLK Jr Day has US markets shut on US Inauguration Day. There were no overnight releases. The BoC’s twin surveys arrive shortly before around 100 executive orders start to fly after 12pmET when Trump takes his oath, and that’s only for Day One. The list into tomorrow stretches to 200 orders. Tariffs—and Canada’s response—will be the main focus for Canada and there are no advance indications of what to expect through the press.
BOC’S SURVEYS
Today’s release of the Business Outlook Survey and the Canadian Survey of Consumer Expectations will be of interest in terms of their broad array of measures on expected growth, hiring—and particularly inflation expectations (10:30amET). The prior survey showed that inflation expectations of both businesses and consumers remained above target. Today’s releases are likely to be stale by about two months. A fresher survey done by the CFIB that measures small business expectations is correlated with the BoC measures and suggests that they may show firmer inflation expectations (chart 1).
YESTERDAY’S RALLY SPEECH HAD LITTLE TO OFFER ON SPECIFICS
Yesterday’s inaugural rally speech by Trump was classic Trump: loud, off the cuff, lacking focus, and short on specifics before a group of like-minded faithful. It was consistent with his approach of making the strongest economy in the world falsely sound like it’s in a crisis to set the stage for how only he can fix absolutely everything. It’s a curious mix of extreme nationalism and downright denigration of the country. Significant parts of the speech were mockingly full of divisive hatred.
He left tariffs until the end as a passing comment. Ditto for taxes. That may or may not mean anything; he can’t do anything on taxes via executive order and we’ll soon find out about how he abuses ancient pieces of US legislation to impose tariffs. He put the vast overwhelming majority of his emphasis on other campaign promises. His unscripted speech was heavy on anti-immigration themes, border controls, deregulation especially around energy, TikTok, anti-DEI remarks, his stance against gun control, stopping illegal immigration, crime while blaming immigrants for all of it, pursuing a US 'iron dome' like Israel's, cutting government, plans to finally go to LA on Friday, cutting taxes, cutting prices despite raising tariffs and somehow raising wages, tariffs, ending the war in Ukraine that may never truly end, releasing JFK and MLK Jr docs, giving education back to the states, etc etc.
Phew! In other words, the speech lacked focus, which we’ve come to expect in Trump’s addresses, and presented a long, divisive wish list. There were ineloquent remarks by Musk who appeared with “X.” But overall there were no specifics which will have to wait until this afternoon when executive orders start flying after he takes the oath after 12pmET.
Interestingly, Trump’s team seems to have borrowed a slogan from Canadian—and specifically Ontario’s—Conservatives. Today’s speech is to have a “revolution of common sense” theme that sounds awfully similar to the “Common Sense Revolution” of former Ontario Premier Mike Harris.
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