US equities swung downwards last night, dragged by mixed corporate earnings.

The dollar index slid 0.25% overnight and continued to weaken in Asian opening hours, despite better-than-expected US housing starts figures. That shows risk sentiment is leaning towards a “risk off” stance ahead of Trump’s inauguration speech later this evening.

George Soros warned on Thursday that the stock-market rally that followed Donald Trump’s November election victory – or so called “Trump rally” - will fade once he takes office and investors are confronted with the uncertainty surrounding the new administration’s policies.

What Donald Trump says tonight matters. If he convinces the market that fiscal stimulus, tax cuts and financial deleveraging plans are going to be implemented, at least gradually over the next few years, we may still see this rally carrying on. However, if he emphasizes trade protectionism and takes a more hostile stance towards emerging economies on “stealing” manufacturing jobs, fears of a potential trade war will probably dominate the market sentiment.

Investors will also be watching China’s final GDP data. Based on recent PMI and inflation data, we have reasons to believe that China’s economy has stabilized. The consensus forecast for its 2016 full year growth is 6.7%.

The final figure will set the tone for markets in Hong Kong and Shanghai today. The Hang Seng Index is facing strong resistance around the 23,150 area, which is also the 100% Fibonacci extension level.

Hong Kong 50 - Cash

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