The trump effect is

[Suff]

starting to tell.

Today we have a senior EU mandarin letting slip that, of course, they will discuss the terms of a trade deal with the UK during our 2 year divorce negotiations.

Really? What a surprise, not.

But Trumps actions to pull out of TPP and start talking about NAFTA renegotiation are something which, I believe, the EU is finding rather scary. Not only have they completely lost TTIP, due to EU intransigence, but it is beginning to look like they won't even be able to _begin_ negotiations on a US trade deal for another 8 years and even if they did, it would be expected to weigh heavily on the US benefit side rather than the EU side which is what the EU always angles for.

Did the EU just wake up and smell the coffee? That the best route to the US markets is going to be a very good trade deal with the UK????

We are living in very interesting times indeed. Trump has trashed one trade deal, is about to start trashing another and has started the complete gutting of the EPA and repeal of the climate accords. Not bad for less than a week in office.

Perhaps the politicians all over the world have just woken up to the fact that they now have a businessman in the hot seat in Washington and businessmen all around him as his executors. Businessmen have little interest in endless discussions on stuff, they either get stuff done or move on.

It's quite interesting. I'm sure the EU are having palpitations. The normal regime is that for 100 days everyone has a honeymoon, the press is nice to the president and the president is nice to the press and everyone else. Then after 100 days they take the gloves off and start ripping into each other. But Trump has started with a bang. No honeymoon, no Mr nice guy, no mouthings and platitudes. Just fight and more fight and action and more action.

Most of which is actually really good for the UK in it's Brexit mode.

I wonder when the press will wake up and start comparing how the UK would have fared if it had voted to remain. With the US executive's antipathy to the EU and the UK stuck within it.

Expect an increasingly fast climb down on the EU side as they see the mayhem going on in the US. Interestingly the £ has stayed strong during the "great reveal". Suddenly the markets have stopped selling the £ and are holding it and building it up. It dropped slightly this morning but is now back to where it was before Christmas at €1.17 and heading for $1.26.

Traders are looking for safety and the $ is not looking like such a safe haven any more with a raging bull sitting in the oval office. The £ is looking a lot better for them as a refuge.

The next meeting of the BOE MPC is on Thursday next week. That should be an interesting one. Growth still strong, employment still growing and unemployment still dropping, inflation higher than expected and growing faster than expected. If it were any other time with a boe governor who had not spent 6 months telling us the economy was going to crash, they'd be hiking rates. I expect the rhetoric to change and the noise to be about when, not if, rates will raise.

This should boost the £ more.

May the Trump effect long continue!