As President Donald Trump takes office for his second term, global markets are poised for significant movements. Investors are focused on Trump’s upcoming policy announcements, key economic data, and corporate earnings, all of which could shape the market sentiment in the coming weeks.

Key Economic Data and Market Reactions

In the wake of Trump’s inauguration, global markets are observing his policy shifts, particularly in taxation, tariffs, and international trade. Any major policy decisions could prolong the “Trump trades,” characterized by a strong U.S. dollar, rising government bond yields, and bullish equity markets. However, a lack of clarity may result in more subdued market movements.

Key economic data this week will center around business activity in the manufacturing and services sectors across major economies. In Europe, flash Purchasing Managers’ Index (PMI) data will highlight ongoing weaknesses in Germany and France’s manufacturing sectors. Germany’s ZEW Economic Sentiment Index, a critical gauge of economic outlook, will also be closely monitored.

In the U.K., the manufacturing PMI is forecast to remain in contraction territory, while the services PMI continues to show modest expansion. These indicators may reinforce expectations of rate cuts from the European Central Bank (ECB) and the Bank of England (BoE) throughout 2025.

Earnings Season and Key Corporate Reports

In the U.S., corporate earnings will remain a primary focus. Netflix, one of the first major tech companies to report quarterly results, is expected to post impressive year-on-year earnings growth. Analysts predict that Netflix’s earnings per share (EPS) will double to $4.23, driven by strong performance in its ad-supported tier.

In Asia-Pacific, the Bank of Japan’s expected rate hike to 0.5% could support the Japanese yen. Meanwhile, the People’s Bank of China is anticipated to keep its loan prime rates unchanged. China’s economy grew by 5% in 2024, and analysts expect continued accommodative policies to support the recovery.

Trump’s inauguration may dominate market sentiment, potentially overshadowing these central bank decisions. Investors will be closely monitoring his moves on trade and energy policies, as these could have far-reaching implications for global markets.