Trump speech leaves markets guessing

President Donald Trump reacts after addressing a joint session of Congress on Capitol Hill in Washington, pic AP

Donald Trump's first speech to Congress has left markets guessing after it revealed little detail about his economic plans despite being acknowledged by many as a solid Presidential performance.

Trump's commitment to spur growth by boosting spending and easing regulation has helped fuel a Wall Street stock rally, sending the value of global equities above US$70 trillion ($98t) and propelling the US dollar higher.

But fears are growing that markets may be getting ahead of themselves and there were hopes that he might deliver some more specific details about his tax policies and plans for infrastructure.

The US dollar and US stock futures rose slightly as he emphasised his plans for strengthening America while providing few new details on his economic strategy.

The yield on 10-year Treasuries rose, adding to earlier gains after odds jumped for a Federal Reserve interest-rate increase in March.

While Trump was strong on immigration, law and order and infrastructure spending there was no specific reference to import tariffs which some analysts interpreted optimistically as lowering the risk of an international trade war.

"There were no extreme comments, nothing on border tax, and investors are feeling relieved," said Ryuta Otsuka, a strategist at Toyo Securities in Tokyo. "Focus is shifting toward the Fed. The yen was already weakening this morning on that."

The speech "has enough to keep markets happy for now," said Shane Oliver, Sydney-based head of investment strategy at AMP Capital Investors, which manages about US$127 billion. "It didn't have a lot of details, but then maybe it never could."

The speech offered few new proposals and Trump made no suggestions on how he would pay for his plans, including a replacement of Obamacare, a tax overhaul including cuts for the middle class, US$1 trillion in infrastructure investment and a large increase in defence spending.

The question facing investors hinges on whether Trump can deliver enough of a plan to appease the optimists amid signs investors' patience is waning. In the days leading up to the speech, investors showed an unwillingness to add to riskier bets with stocks near all-time highs.

"No details, but expectations had been lowered, so it's not a huge surprise," said Mamoru Shimode, chief equity strategist at Resona Bank.

"The 'phenomenal' plan will be unveiled at some point, though the market is now looking beyond that and thinking whether any of it will be feasible."

The odds of an increase in March for US interest rates rose above 70 per cent at one point, pushing up the dollar and dragging shorter-maturity Treasuries lower.

Federal Reserve Bank of New York President William Dudley said the case for tightening has become a lot more compelling.

Fed Bank of San Francisco President John Williams said he expects a rate increase to receive "serious consideration" at this month's meeting. Fed Chair Janet Yellen speaks on Friday.