Yesterday, in New York City, the President-elect of the USA Donald J. Trump held the press conference by 9 days before his official inauguration instead of Barack Obama. Even before the event, many analysts expect strong and volatile statements, that can greatly affect the market.
Market analysts and marketing department of the company Trade-24 collected the most important comments of the future 45th President of the United States, that have impacted the bids and the main quotes. For a convenient overview, we have divided the foreign policy and the domestic policy of the new guarantor of the US Constitution.
The foreign policy aspect
During the election campaign Trump promised to build 1900 miles a wall along the Mexican border to strengthen the fight against illegal migration from the neighboring country. In addition, the future president of the USA says, that it can take much of the capitals of the neighboring country, which are concentrated in the automotive and chemical industries.
Because of these promises, investors and traders of the North American region have started to gradually reduce its interest in Mexico, which led to a collapse in prices for bonds in this country, as well as it would lowered the value of the peso by the few hundred points.
Incidentally, during the speech of Donald Trump at a press conference in the US dollar value of the currency pair USD/MXN fell by 1.13% from the beginning of the opening of trading. However, analysts at Westpac Bank believe, that the speech of the US President-elect is not given anything substantial for economic performance, but rather has a certain grace period before the onset of action since the end of January. But now traders are beginning to wonder, what is the next step Trump, as the prospects for cooperation and partnership between Mexico and the United States remains vague.
Asian vector of Trump’s policy
Meanwhile, as the President-elect of the United States gave a press conference in New York, at the other end of the globe Chinese and Japanese investors took the breath expecting for Trump’s statements. The main interest of Asian traders and market players concerned the withdrawal of enterprises, revision of the program of external loans and the resumption of political dialogue. In these countries do not deny, that they expect the unpredictable moves and tensions in states relations states from Donald Trump’s statements.
Due to China, which is experiencing a period of decline in economic influence in the region in cause of financial and economic losses, the leadership of this country more uncertainty pumps. Recent decisions of the People’s Bank of China may serve as proof of that, which are the limiting long-term loans, BitCoin exception of its market, the decline of US currency purchases to pay for rendered services . Only starting from January 20th, it will become clear whether China is ready to solve the problems together with the US, or will continue “trade war.”
At the same time, the Japanese government is trying to look for compromises, but market relations are very different from political issues. Nikkei 225 index continues its peak on and only the fall of the dollar against the yen is able to stop a further decline rates. So, by morning of 11th of January the dollar dropped to mark 114.47 yen per dollar from 115.41 yen at the previous auction. At the same time, he reached the level of 114.23 yen to the dollar, which was the lowest value since December 9th. On this basis, it is worth noting clear problematical Japanese market at this stage, that was decimated the “dieselgate” and deflation of the Japanese currency.
US Domestic policy
The End of ‘Obamacare’?
At the beginning of his election campaign, Donald Trump has promised to review the program of medical care, which the American media called ‘Obamacare’. Asked by a journalist, US President-elect mentioned the value of the project, which cost the country’s budget of $ 1 billion, was not able to fully justify itself. The main reason for the failure is the number of pharmaceutical and bioengineering incidents, that have led to a drop in share prices after the statements Trump.
After these words, the Nasdaq and the IBB indexes fell down -2.09% and -0.51% respectively. In addition, the early resistance of the shares due to financial injections can lead to the strong volatility to the price collapse to 5,000 points of Nasdaq, the IBB – to 273 points. However, the question remains open: how the new White House administration will change the rules of medical support of the country and when the new reform will be introduced, as the US federal budget for 2017 doesn`t have enough money to realize that.
Investments and new financial programs
The last point of President-elect speech was the revision of a number of programs. However, no one asked about the increase of investments to the military complex, the reducing of the state security services and what affect will give the reserves for the implementation of the pension and insurance reforms. So far, this issue is in the area of speculation by media and the enemies of the future White House owner. Experts add, that Trump also has not provided a desirable investor timing and details about the planned measures from infrastructure costs to the trade agreements. “There were no new details about the fiscal stimulus”, – stressed the analysts of the UOB banking group.
Summing up, it should be added, that the general and streamlined phrases at yesterday’s press conference also left many painful questions. Many political and economic analysts expect certain decisions from 20th of January. To tell the truth, it is possible now, that the press conference was quite different from the market-oriented signals or comments, that Trump has made in the acceptance speech on 9th November 2016. So for now, plans and solutions of 45th President team remain unclear.