As we embark on the Trump presidency, will we see a new era for business and financial markets? These are some of the changes we can expect as Trump settles in at the White House.

Financial markets were watching closely on Friday as the 45th president of the United States made his inauguration speech. Any allusion to policy during the speech had the potential to provoke a reaction in financial markets and some of the sensitive issues analysts were looking out for were Trump's attitude to China, the use of fossil fuels, international trade deals and the future business climate within the US. Meanwhile, financial market optimists expect that lower corporates tax rates, infrastructure stimulus and lighter regulation could accelerate economic growth and boost corporate earnings.

'America first' brings worries of strong dollar

In his speech on Friday, Trump vowed to 'put America first'. In the past he has said he will take the US out of the Trans-Pacific Partnership (TPP), a proposed trade agreement among 12 Pacific Rim countries that aims to reduce trade barriers. The 'America first' stance is seen by some as protectionist and corporates taxes are expected to decrease significantly. However, such policies are likely to keep the dollar strong, which will not help US exporters. An editorial in the Financial Times says: “If Mr Trump genuinely wants the currency to weaken, he will need to abandon his impulse for protectionist policies that pump up US growth at the expense of the rest of the world.”

The White House is now also prioritising an 'America first energy plan', which might see the US pull out of the Paris agreement and would see the dismantling of the Clean Power Plan (CPP), leading to an increased reliance on coal for energy. This could boost commodity prices in the coming year, as suggested in this Thomson Reuters blog. 

Financial markets have rallied since Trump's election victory on 8 November but it's not clear whether this can continue as the president begins his first week in office. The FT's correspondents write: “Some analysts and investors have predicted that a US spending splurge and accelerating inflation will kill the 30-year bull run for fixed-income, while others argue that the political challenges in enacting fiscal stimulus, still-subdued global economic growth and the dangers of trade wars will continue to buttress the bond market.”