- Donald Trump elected as 45th U.S. President
The 58th U.S. Presidential Election ended with a surprise victory of Republican candidate Donald Trump.
Trump succeeded by obtaining more than the 270 necessary electoral votes, despite narrowly losing the popular vote to his Democratic opponent Hillary Clinton.
Following the unexpected result, the selloff that started on global stock markets and the loss of the dollar against major competitors such as the euro and sterling did not last long.
By contrast, the dollar gained value against the currencies of several emerging countries, particularly the Mexican peso, partly because of Trump’s protectionist and populist policies on trade. On the other hand, it was noteworthy that the ruble appreciated after Trump's victory, reflecting the expectations of more positive U.S.-Russia relations.
Following Trump’s victory, gold at first rose to a peak of $1,340 per ounce as investors retreated from uncertainty, but as financials recovered quickly, it fell back to $1,227.
After the election results, the price of oil fell by $44.40 per barrel to its lowest level in the last three months, before recovering some of its losses and closing the week at $44.75.
-Markets recovered with Trump’s unity messages
Trump’s victory speech, marked by messages of unity and solidarity, helped the global markets recover quickly from their initial shock following the election results.
Tuesday night, the President-elect said “I pledge to every citizen of our land that I will be president for all Americans, and this is so important to me. For those who have chosen not to support me in the past, I’m reaching out to you for your guidance and your help so that we can work together and unify our great country.”
Furthermore, The Wall Street Journal interview, which was released on Friday, showed that Trump could keep some of Obamacare's (healthcare) provisions, which he repeatedly promised to completely repeal throughout his campaign.
Among the parts to be kept according to the interview, are requirements which prohibit insurance companies from turning away persons with a previous illness and a provision for parents to be allowed to include their children on their health insurance until the age of 26.
In addition, Trump's commitment to trade restrictions was not brought up after his victory, potentially signaling that he would take these issues slowly.
Trump strongly railed against the Trans-Pacific Partnership (TPP) and the Transatlantic Trade and Investment Partnership Agreement (TTIP) and repeatedly voiced his intention to terminate the North American Free Trade Agreement (NAFTA) during his election campaign.
In addition, he threatened tariffs of 45 percent and 35 percent for goods imported from China and Mexico, respectively.
- New week ahead
On top of this week's major developments in the United States are statements from Fed officials.
Fed officials' messages will have an impact on the direction of the markets, as Trump’s election has raised uncertainty over whether the bank will raise interest rates in December. Among the speakers are Fed Vice President Stanley Fischer and New York Fed President William Dudley.
The U.S. data to be released this week include retail sales, industrial production, and producer and consumer prices. Markets will also react to any news or developments regarding the new administration’s approach to the economy.