Yesterday was a quiet day for the market in terms of economic releases. It’s a different story for today, with the decider of the US election – with it being so close to call, it is likely that we will first see the result on Wednesday. What outcomes could the winner have on markets and economic forecasting?
Well, if we first start to look into a possible Trump win. Trump has said that if he wins, he will cut taxes and tariffs. This would be an injection to US inflation as there would be more disposable income for both households and businesses. A larger spending pool of funds would likely drive stock markets, bond yields and the USD higher. The affect it could have on other countries policies? Well interestingly some market analyst suggests that if Trump wins, ECB might change their tone for their December interest rate decision and push for a 50 basis points rather than 25. The reason for this is that the European Central Bank rather frontload its quantitative easing before there is possibilities of limitations and risk factors that would be protected from Trump’s policy changes.
