Wednesday 9 November 2016

The new US President - Donald Trump!

The election campaign in the United States once again turned by 180 degrees, as director of the FBI Comey promised not to initiate criminal proceedings against Clinton. Polls claimed that her rating has risen sharply and the dollar jumped after falling at the end of the last week.
Survey results were wrong - we now know that they can not be trusted - it refers primarily to the European elections next year and the referendum in Italy in December.
Policy - is one big unknown. Nominally, as result of election, Trump controls both houses of the parliament, which means that he can implement large-scale political initiatives. However, given the fact that some members of his own party opposed his candidacy, he may have difficulty in complying with these plans - except, perhaps, replacing Obamacare with something else; Yellen's days at the Fed also are numbered (her mandate will end January 31, 2018), it is also likely to be implemented infrastructure investment and tax reform - the latter is most favorable for the US economy in the short term.
The first reaction of the market and further movement:
Safe assets have risen sharply in value against the USD, in particular this applies to JPY. Emerging-market and risk currencies, especialy MXN, collapsed. Given that such a reaction was expected, now that the results are already known, these movements quickly recoup in the opposite direction.
It's amazing how fast prices corrected after the first reaction. We can say that the uncertainty for some time reached a peak, and now we can return to a long-term long positions on the dollar and yen, and shorts in the euro.


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