World markets rattled as Trump heads to White House

Investors flee risky assets over worry that Trump victory will cause economic and global uncertainty.

By REUTERS
November 9, 2016 08:07
2 minute read.
New York Stock Exchange

New York Stock Exchange. (photo credit: REUTERS)

 
X

Dear Reader,
As you can imagine, more people are reading The Jerusalem Post than ever before. Nevertheless, traditional business models are no longer sustainable and high-quality publications, like ours, are being forced to look for new ways to keep going. Unlike many other news organizations, we have not put up a paywall. We want to keep our journalism open and accessible and be able to keep providing you with news and analyses from the frontlines of Israel, the Middle East and the Jewish World.

As one of our loyal readers, we ask you to be our partner.

For $5 a month you will receive access to the following:

  • A user experience almost completely free of ads
  • Access to our Premium Section
  • Content from the award-winning Jerusalem Report and our monthly magazine to learn Hebrew - Ivrit
  • A brand new ePaper featuring the daily newspaper as it appears in print in Israel

Help us grow and continue telling Israel’s story to the world.

Thank you,

Ronit Hasin-Hochman, CEO, Jerusalem Post Group
Yaakov Katz, Editor-in-Chief

UPGRADE YOUR JPOST EXPERIENCE FOR 5$ PER MONTH Show me later Don't show it again

The US dollar sank and stocks plummeted in market mayhem on Wednesday as investors faced up to a shock win for Donald Trump in the US presidential election that could upend the global political order.

European shares looked set to follow with losses of more than 4 percent as every new TV network projection in the US election showed the race to be far closer than anyone had thought, sending investors stampeding to safe-haven assets.

Be the first to know - Join our Facebook page.


Sovereign bonds, the Japanese yen and gold surged while the Mexican peso went into near free-fall in chaotic trading as once again polls and betting markets proved woefully wrong.

"Markets are reacting as though the four horsemen of the apocalypse just rode out of Trump Tower," said Sean Callow, a forex strategist at Westpac in Sydney.

"Or at least 3 of them - it might be 4 when the prospect of a clean sweep of Congress sinks in."
Final moments of Election 2016

As of 0742 GMT, news networks were calling the election for Republican candidate Trump and CNN reported that his Democrat rival Clinton had conceded.

US stock futures dived 5 percent at one point, worse than the carnage caused by the British vote to leave the European Union in June that wiped trillions of dollars off world markets.



Investors fear a Trump victory could cause global economic and trade turmoil and years of policy unpredictability, which among other things will discourage the Federal Reserve from raising interest rates in December as long expected.

Fed fund futures were even starting to toy with the idea of a cut in rates next year <0#FF:> and it was possible the Bank of Japan and European Central Bank might be forced to ease policy yet further.

With FX markets reeling, South Korean authorities were thought to have intervened to steady their currency, and dealers wondered if central banks globally would step in to calm nerves.

Japan's top currency diplomat signalled Tokyo's readiness to intervene if necessary as the surging yen threatened to snuff out its fragile economic recovery.

The scale of the scare was clear in the Mexican peso, which plunged more than 13 percent against the dollar at one point in the biggest daily move in two decades.

"A lot of Trump's negative geopolitical rhetoric was concentrated around Mexico and trade with Mexico and tearing up the NAFTA agreement, so the peso just become this natural barometer of the election," said Deutsche Bank EM FX Strategist Gautam Kalani.

The risk of a global trade war likewise hammered currencies across Asia, with the Australian dollar leading the rout.

The story was very different against the safe-haven yen, with the U.S. dollar shedding as much as 3.3 percent to 101.85 yen. The euro jumped 2.3 percent to $1.1278 as well though both had started to nudge off their highs as Europe opened.

Related Content

April 3, 2018
Cynthia Nixon’s bid for NY governor sets up a clash over Israel

By JTA