US Election Results Shake Global Markets; Eyes on Trump’s Economic Policies (Current Issue No. 2793)

The US presidential election came out hugely surprising. Not only did Donald Trump win the election to become the 45th US President, but the Republican Party also maintained their majorities in both the Senate and House, increasing the possibility of Trump's policies to get into action.

At present, financial markets are responding to Mr. Trump's victory with turbulence. High-risk assets have suffered abrupt declines, but some have bounced back overnight. With reference to the US economic outlook, we at KResearch believe that the Trump administration will seek to quickly introduce his pro-growth policies, given that they are believed to render tangible results for their economy in the shortest time. Even so, since the US recovery path nevertheless relies upon many determinants, it is more likely that the Fed will make an interest rate decision based on how markets react to the Trump success; in other words, such a Fed move might be ;behind the curve”. This could fuel high volatility in financial markets.

In light of this, we are of the view that the victory of Donald Trump has sent global financial markets into a tailspin, but his focus on pushing the economy toward growth helped bring markets back up overnight. Moreover, the probability that the US will use such pro-growth policies during his first year in office has made the US economic outlook positive, as estimated earlier. Meanwhile, Thai exports may only benefit in an ideal circumstance wherein the US enters into trade deals with negotiating nations and that no conflict or harsh retaliation toward one another is instigated.