Trump Trades

11 November, 2016

The story being seen in stocks markets and currency markets in the wake of the US Presidential election result is starting to diverge. Asian currencies have been under pressure, with the Korean won, Indian Rupee and Aussie dollar all weakening overnight. Recall that it was Asia that took an initial bearish view of developments on Wednesday before Europe came in and lifted things. Asia has more to lose from a more protectionist stance from the US administration. The US runs a trade deficit with both, but the Asian deficit is around 5 times that of Europe, hence the nerves. There have also been initial noises regarding NAFTA (the trade agreement between the US, Canada and Mexico), which Trump has threatened to re-negotiate or move. Both currencies (more so the Mexican peso) retain their weaker stance gained in the wake of the results.

Elsewhere, sterling is holding its head above water, cable above 1.25 and EURGBP moving below the 0.87 level, from above 0.90 earlier in the week. The policy backdrop continues to favour the pound, with the BoE not able to cut rates given the deteriorating inflation environment ahead. For today, there are no major data releases, so the continued settling of the dust in the wake of Tuesday’s events will remain the dominant theme.


Source link  
USD defense will be short-lived

The dollar index reached the one-year highs on Wednesday due to the demand for safe assets. USDX reached level 95.43 on Thursday, breaking the peak levels...

FOMC expect to reach neutral policy

The FOMC minutes highlighted some increased risks to the US economy particularly concerning trade relationships but the view still holds that the Fed should...

US FOMC expected to raise rates again

UK Consumer Price Index (YoY) (May) is expected out at 2.5% against 2.4% previously. Producer Price Index – Input (YoY) (May) is expected...


PMI expected to weaken further

UK Construction PMI (May) will be out with an expected headline number of 49.7 from a prior number of 52.5. The consensus is for a drop in the numbers...

BOE Expected to Keep Rates at 0.5%

UK Industrial Production (YoY) (Mar) is expected to be 3.1% against a previous 2.2%. Industrial Production (MoM) (Feb) is expected to be 0.2% against...

Consumer Price Index Takes Centre Stage

UK Budget Report will be released. This is a mini-budget and outlines the government’s updated budget for the fiscal year, including infrastructure...


US earnings hit sweet spot for markets

The US Nonfarm Payrolls data released on Friday showed a strong increase in job creation and, combined with the lower than expected increase...

Bank of Japan interest rate decision

The Bank of Japan Interest Rate Decision was as expected and left unchanged at -0.1%. The Japanese 10-Year JGB yield target is around zero percent...

Oil Gains and GBP Stumbles

On Tuesday, the American Petroleum Institute said crude stocks in the United States fell by 7.4 million barrels last week. That is almost twice...

  


Share: