Wall Street continues trading in a net increase, despite the dramatic drop in foreign currency reserves of china in October, after the number one ofFbi, James Comey, has confirmed that have not been found new evidence against Hillary Clinton , and then the candidate for the democratic presidential elections in the Usa will not be indicted for the so-called Emailgatand. In detail, the Dow Jones avanza dell’of 1.89% and the S&P 500 is 2.01%. The Nasdaq Composite salt 2.26%. A slight rise of the index of the reference oil with the Brent 0.29% 45,70 dollars per barrel and the Wti, which climbs 0,73% 44,39 usd/barrel. The day of the vote is almost here, says Ellen Zentner, senior economist for the U.s. at Morgan Stanley, stating that markets are “frozen” in the waiting.
Many investors believe that a victory of Clinton it would be a positive factor for the asset risky, like equities, at least in the short term. In addition, the phase of calm post the victory of the candidate of the democratic would also allow the Fed to raise interest rates at its meeting of December without any problems. The probability of a rise in interest rates by the Federal Reserve in December meeting and returned to climb in the wake of the today’s climate of risk appetite on the markets. On the basis of the future on Fed Fund in fact, the market believes that there is a possibility of 76% that the Bank is acting at the end of the year, compared to 67% of Friday last. “A real debate on the prospects of the world economy does not seem to have taken on a central role in the decision-making process of the central Bank of Usa”.
The stresses Yves Longchamp, Head of Research at Ethenea Independent Investors, remembering, however, that this year global growth is expected to remain on average at 2.9%, after being regularly diminished by the global financial crisis, global inflation could slow down further, reaching just 2.8%, and the productivity remains weak everywhere. “It seems that on the Fed meeting of December pesera’ solely on the fact that in September, an unusually large number of governors (Esther George, Loretta Mester, and Eric Rosengren voted against the president, asking for an increase in interest rates. For an institution that has cohesion as a point of strength, and that in the past few months and are committed to raise several times the rates this year, an intervention would make sense only in order not to lose credibility,” says the expert. “Our forecasts about the economic developments in the coming months have not changed. The context of the economy zero in which we find ourselves remains unaffected.
Even though the Fed will lift itself up rates, other major central Banks will maintain probably the current accommodative. The latest data on growth and on inflation are contained and do not show signs of recovery”. The victory of Clinton to the american elections must not be, however, taken for granted. “We have seen from the referendum in the Uk on Brexit, as the surveys they can make mistakes,” warns Luke Hickmore, Senior Fixed Income Fund Manager Aberdeen AM, stressing, however, that, in the outcome, “the formation of the house of Representatives will be crucial for both candidates. We have seen how Parliament Uses has hampered the policy of Obama.
Both might face the same difficulties”. Passed the vote it also adds the expert, “the volatility is not will disappear. Once concluded the election, investors will begin to worry about the meeting of Opec at the end of the month, of the constitutional referendum to early December and the meeting of the Fed next month. Not to mention what to do while we are fast approaching the end of QE”. On the bond, on the basis of the current positioning, “if Clinton wins, could lead to an increase in long-term yields five basis points,” says Bastien Drut, strategist at Amundi Asset Management. If you were Trump to win, for the expert would see “a drastic reduction of the probability of a second rise in interest rates” of interest on the part of the Fed, “the context of flight-to-quality and increased risk aversion”, factors that could push the yields on long-term decline of about 20 basis points.
it is likely that a victory of Donald Trump, at least initially, would spur further risk aversion, because of the uncertainty about the policy of the united states would be decisive. The responses of financial markets are directly linked would effect, and Treasury bonds would probably rally. The political uncertainty and concerns about protectionism and the fiscal policy announced by the republican candidate could mean a request by investors of the risk premiums, the highest for the securities.
A victory for Clinton, on the other hand, would drive with great odds investors towards activities to more risky, such as shares, also touching on the bonds. The focus is likely to move quickly towards the efforts federal for the rate increase. In the wake of the return of risk appetite, the cost of financing the Treasury ten-year is set to rise slightly to 1.83% or that of the biennale is to 0,82%. On the currency finally, the dollar has recovered the ground lost, with the euro/usd which is below the level of 1.11 to 1,1039.
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