US: Focus on Trump’s “State of the Union” address - TDS

Analysts at TDS note that the US President Donald Trump gives his first address as President to a joint session of Congress (similar to the State of the Union address) at 9 PM ET today and markets are widely looking toward this event as an opportunity for Trump to discuss his policy priorities in some detail.

Key Quotes

“Note that the first reactions to his remarks will come in relatively illiquid Asian markets. This creates a risk for wider market moves on the tone of the speech and any surprises.”

“Our base case is for a speech that is long on broad themes but short on details. This might constitute a slight disappointment for market participants.”

“Recent headlines have suggested an emphasis on his budget proposals, with anti-terrorism and potentially infrastructure spending being featured. The White House earlier included they would seek a $54bn increase in military spending, offset by similar sized cuts in non-defense outlays.”

“That said, based on his press conferences and selected other speeches since assuming office, we think it is far more likely that he will give a strong sales pitch aimed at a very general level — a statement of his negotiating position, in part. The level of detail about policy proposals and their timelines that market participants crave may have to wait for a later venue, in our view.”