Trump trade fires up

Briefly in today’s #5in5withANZ podcast below:

US stocks surge more than 2% to fresh record highs as stock investors celebrate Donald Trump’s re-election. But bond holders aren’t so sure. US Treasury yields jumped 18 basis points to a six-month high as traders bet on tax cuts, higher borrowing and growth. Meanwhile New Zealand’s jobless rate rises less than expected, and Malaysia holds rates.

5 things to know in 5 minutes:

1. Donald Trump has all but been confirmed as winning the US Presidential election. US stocks and Treasury yields surged on the result, as did the US dollar. ANZ Head of G3 Economics Brian Martin says an expansionary policy programme will come in over the top of an economy which is currently in a sweet spot.
2. Brian says Donald Trump’s tariff agenda might also have an effect on those US interest rates - and around the world as well.
3. The US Federal Reserve will also be watching the market reaction closely ahead of its interest rate decision tomorrow. Brian says expectations for a 25 basis point cut remained steady, while bets on another cut in December actually rose.
4. New Zealand’s unemployment rate rose from 4.6 to 4.8% - lower than the 5% forecast by the Reserve Bank. But employment fell 0.5% - slightly more than expected. ANZ Senior Economist Miles Workman says, all in all, the data point towards a 50 basis point to the OCR being on the cards at the end of the month.
5. Also amid all this, Malaysia’s central bank had a rates decision, opting to hold at 3%. ANZ Economist Arindam Chakraborty says the BNM highlighted resilient domestic expenditure and higher export activity pointed to sustained strength in activity.

In our bonus Deep Dive interview:

ANZ Head of FX Research Mahjabeen Zaman, GAICD analyses the currency implications of that election win, following a sizeable jump in the US dollar overnight.

Cheers

Bernard

PS: Catch you tomorrow with further market reaction to the US election result.