Stock markets around the world have been declining to start the first full week of the Trump Administration as the potential risks to global politics and trade from his policies become more apparent. Capital is flowing back into defensive havens following weekend developments, with Gold and JPY gaining ground again. GBP is particularly strong outpacing EUR to the upside on the back of a roaring UK economy and the potential for closer ties between the UK and US. The Nikkei is down 1.2% on the currency rally while The FTSE and Dax are down 0.4%. US index futures are down 0.2%. In addition to political news, this week is the heart of earnings season with reports due from Boeing, Caterpillar, Google, MicroSoft, Intel and many many other big companies. So far strong reports have met with limited upside response. while profit warnings have been punished severely. This indicates market expectations remain high with strong growth already priced in and the potential for negative surprises higher. Following on from the America First comments in his inauguration speech, President Trump indicated over the weekend the first world leader he plans to meet in person is UK PM May this Friday. He also plans to meet with Mexico's President and Canadian PM Trudeau shortly to discuss NAFTA and to pull out of the Trans Pacific Partnership, indicating the first phase of his economic plan is going to be try and change trade relationships. CAD and MXN have bounced back a bit from depressed but that could be short-lived relief, we'll see. President Trump also spent time on the weekend bickering with the media and others over the size of the crowd at his inauguration and facing major protests. This reminds the market that there are a lot of potential distractions and opposition which could delay if not block his efforts raising the risks for markets like US stocks and USD that had recently priced Trump to perfection. Commodity markets are mixed today. Metals are climbing with copper up 0.6% and aluminium up 1.0%. Crude oil is taking a hit falling 1.2%. Traders remain concerned about the potential increasing US exploration activity could lead to increased production as Friday’s Baker Hughes drill rig count was a crossover week, the first time in a very long time that the number of active rigs was up over the same week a year ago. This prospect has overshadowed reports that 80% of promised OPEC production cuts have been implemented, running ahead of schedule and that processes for monitoring and meetings to discuss progress have been set up. Corporate News There have been no major corporate announcements so far today. Economic News US Baker Hughes Drill rig count (Friday) 694 vs year ago 650. Upcoming significant economic announcements include: There are no major reports scheduled for North America today.