Goldman Sachs has slashed its forecast for British and European financial progress subsequent yr amid fears Donald Trump will slap taxes on imported items from all over the world.
The funding financial institution now expects the UK economic system to develop by 1.4pc subsequent yr, down from earlier forecasts of 1.6pc.
It additionally predicts the eurozone will broaden by 0.8pc, a downgrade from earlier forecasts of 1.1pc.
The financial institution’s economists warn {that a} contemporary inflow of US tariffs on imports from Europe will hammer progress, notably if the latter retaliates with border taxes of its personal.
That would knock 1pc from eurozone GDP, Goldman Sachs mentioned, together with 1.1pc from trade-dependent Germany and 0.7pc from Britain’s economic system.
However, a few of that may be compensated by additional spending on defence, as European nations put together for Trump probably scaling again American help for Ukraine.
“Taken together, our analysis points to a 0.5pc hit to real GDP in the eurozone, ranging from 0.6pc in Germany to 0.3pc in Italy, with a moderate 0.4pc hit to the UK,” mentioned Goldman’s analysts, led by Sven Jari Stehn.
They predict that the majority of the affect on progress will fall between the primary and fourth quarter of subsequent yr.
Christian Schulz at Citi added that the affect will come not solely from tariffs on items bought by European companies to Americans but in addition from these exported to China, which faces a mooted 60pc tariff on merchandise bought to the US.
He mentioned: “EU goods exports were worth 3.1pc of EU GDP in 2023, with a trade surplus worth 1.1pc of GDP. Germany and Italy would be more exposed than the EU average; France and Spain less.”
Xiangrong Yu at Citi mentioned a full 60pc tariff on Chinese items, as threatened by Mr Trump, would slash China’s progress.
He mentioned: “A possible 60pc tariff could in theory make it prohibitive for Chinese goods to enter the US market. The growth impact could be around 2.4 percentage points under such an extreme scenario.”
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The re-election of Donald Trump has prompted US shares to hit all-time highs, however main European inventory indexes fell.
Currently the S&P 500 is up 2.4pc, the Dow Jones Industrial Average of 30 main US firms is up 3.4pc and the technology-heavy Nasdaq is up 2.8pc.
The pan-European Stoxx 600 closed down 0.5pc.
We will probably be again within the morning earlier than the London Stock Exchange reopens, however you can too read our live blog on the US election results here.
You can inform the story of this election in two numbers. Under President Joe Biden, the online value of the underside 50pc of American households grew by 8.5pc in actual phrases. Under Donald Trump, from January 2017 to January 2021, it grew by 127pc. People remembered that, and now Trump has once more been elected president.
While polls have been tight all through the race, heading into election day the problem voters mentioned they cared about most was the economic system, and the candidate they mentioned was finest in a position to deal with it was Trump.
Under Biden, shopper sentiment sank decrease than its lowest level within the pandemic, and the exit polls bore this story out. Voters anxious that the economic system was doing badly, they have been extra prone to really feel that their households have been worse off than they have been 4 years in the past, they have been overwhelmingly prone to say that inflation had caused them hardships. And they have been voting Republican.
Democrats can argue that voters have been mistaken till they’re blue within the face. They can say that the macroeconomic prime line was good, that GDP progress, even adjusted for inflation, has been strong total and in per capita phrases, or that unemployment is on par with its fee in 2018, or that inflation is again on the right track.
Absolutely none of that can change the truth that voters have been in a position to examine their expertise beneath Biden with their expertise beneath Trump, and make up their very own minds.
As it turned clear that Donald Trump was surging to an enormous victory over Kamala Harris, Elon Musk took a web based victory lap. “Dark MAGA assemble,” he tweeted whereas attending Trump’s victory party in Florida, later including: “The future is going to be fantastic.”
Pictures from Mar-a-Lago confirmed Musk deep in dialog with Trump, suggesting a decent bond between the 2. Trump repeatedly praised the Tesla billionaire throughout his victory speech, calling him a “special guy” and a “super-genius”.
The call-out was the reward for Musk donating enormous sums to the Republican’s marketing campaign, for planting himself in Pennsylvania to run a get-out-the-vote operation, and for ceaselessly selling Trump to his 203m followers on the social community now often known as X.
He additionally helped to safe the endorsement of podcasting star Joe Rogan, who mentioned he had been influenced by “the great and powerful Elon Musk”.
Musk spent greater than $130m to help Trump and different Republicans, though it’s already an funding that has repaid itself a number of occasions over. Tesla’s shares rose 14pc in pre-market buying and selling on Wednesday, including round $15bn to Musk’s $264bn fortune.
Wall Street titan Jamie Dimon has urged Americans to unite behind its president elect, whereas a supply mentioned he would stay on the financial institution relatively than be part of Donald Trump’s administration.
Mr Dimon has been the topic of repeated hypothesis as a candidate for US Treasury Secretary by each Republicans and Democrats, however he mentioned final month that his probabilities of taking an official publish have been “almost nil”.
“Our country is now concluding one of the hardest fought and at times divisive elections in our recent history,” Mr Dimon mentioned in an announcement on Tuesday earlier than the election outcomes emerged. “Soon it will be time for all of us to unite behind our President elect and all of our national leaders.”
Mr Dimon had beforehand downplayed the probabilities of taking a authorities place, telling analysts in October that “I probably am not going to do it … but I always reserve the right” to rethink.
JPMorgan’s inventory surged 11.2pc at the moment alongside robust good points for different US financial institution shares. Investors speculated the incoming administration can be extra pleasant to lenders.
The Telegraph has approached JPMorgan for remark.
Donald Trump’s victory within the US presidential election “increases risks for the global economy”, Bank of France chief Francois Villeroy de Galhau mentioned at the moment.
With “likely more protectionism” and an elevated US price range deficit, a second Trump time period “both increases risks for the global economy and the need for Europe to remobilise,” Mr Villeroy mentioned.
The election of Donald Trump will make life harder for the Bank of England and is “likely to be stagflationary”, main economists have mentioned.
Stagflation is the mixture of excessive inflation accompanied with unemployment and stagnant demand.
Pantheon Macroeconomics mentioned:
We assume the US election outcome, in isolation, gives a excessive threat that we change to assuming the BoE cuts Bank Rate thrice subsequent yr as an alternative of our present name for 4. Higher inflation and international commerce disruption ought to imply tighter financial coverage than in any other case…
The FTSE 100 surged this morning after the US election outcome turned clear, rising by as a lot as 1.6pc at one level, however it erased its good points within the afternoon.
Susannah Streeter, head of cash and markets at Hargreaves Lansdown, mentioned the turnaround got here as buyers “switched their focus to concerns about the macroeconomic environment”. She mentioned:
If Trump’s most radical plans for tariffs are imposed there are deepening considerations in regards to the knock-on impact on the UK and different European economies.
Mr Trump has repeatedly mentioned he’ll impose sweeping import tariffs which, in flip, may hit UK progress, in accordance with economists.
Cryptocurrency shares soared at the moment as buyers cheered an finish to the Democrats’ crackdown on the sector as Donald Trump swept to victory within the race for the White House.
Shares in Coinbase, the cryptocurrency trade, climbed by 25pc, valuing the enterprise at $60bn (£46bn).
Robinhood, the inventory buying and selling app which additionally gives cryptocurrency buying and selling, was buying and selling up greater than 17pc in New York. The worth of Bitcoin climbed greater than 7pc to a file $75,000 within the wake of Mr Trump’s victory.
Coinbase, one of the vital in style cryptocurrency apps, has been locked in a bitter row with US regulators, with the US Securities and Exchange Commission suing the corporate for allegedly providing unregistered securities.
Coinbase has accused the regulator of failing to supply clear guidelines for buying and selling cryptocurrencies and countersued the company. The instances are ongoing.
Under Joe Biden’s White House, regulators have tightened the screws on the cryptocurrency trade, which has been suffering from fraud, cyber assaults and bankruptcies, launching a collection of authorized challenges and investigations towards firms within the sector.
Mr Trump, nonetheless, has pledged to “end [the] Democrats’ unlawful and un-American crypto crackdown” and “defend the right to mine Bitcoin”.
His help for the trade helped garner tens of thousands and thousands of {dollars} in donations from distinguished cryptocurrency executives, regardless of Mr Trump as soon as warning Bitcoin represented a “scam against the dollar”.
Donald Trump’s victory within the US presidential election unleashed a large rally within the greenback, fuelled a rally on Wall Street and punished bond costs as expectations of tax cuts and tariffs on imports drove optimism about financial progress.
Wall Street indexes soared, with the benchmark S&P 500 leaping 2.1pc to a file excessive and big good points in areas reminiscent of small cap shares and banks which are poised to learn from President Trump’s anticipated lighter regulatory contact.
The Dow Jones gained 3.2pc and the tech-heavy Nasdaq gained 2.4pc.
The greenback was set for its largest one-day leap in over two years. Bitcoin hit file highs and US Treasury notes have been battered.
Trump’s pledges to boost tariffs, reduce taxes and slash laws inspired buyers to dive into a variety of belongings that seemed prone to profit from such insurance policies.
Some markets that might undergo beneath more durable tariffs, together with these in a few of main US buying and selling companions, bore the brunt of the sell-off. The Mexican peso slumped to its lowest in over two years whereas the euro was set for its largest every day drop since 2020.
Paul Christopher, head of worldwide funding technique on the Wells Fargo Investment Institute, mentioned:
Everywhere you look, there’s the thumb prints of those election outcomes for markets.
The worth of oil has been fluctuating at the moment as merchants mull what a second Trump presidency imply for the power sector.
The most important US measure of oil costs – known as West Texas Intermediate – fell as a lot as 3.1pc at the moment. It has additionally been up as a lot as 0.9pc and is presently down 0.1pc.
Guy Foster, chief strategist at wealth supervisor RBC Brewin Dolphin, mentioned:
Oil has been unstable as information of the election outcome has filtered in. President Trump has been outspoken about his need to reinvigorate the power sector. He has appreciable capability to affect regulation, which may have an effect on each the demand for, and provide of power.
The UK’s FTSE 100 jumped by about 1.6pc when markets opened this morning as an anticipated Republican win supplied some certainty for the way forward for the world’s largest economic system.
It remained about 1.2pc greater later within the morning when it was declared that Donald Trump had received the election.
However, the index fizzled out this afternoon, closing 0.1pc down.
Meanwhile, the FTSE 250 gained 0.4pc, having risen as a lot as 2.2pc.
Scotch whisky and different prime British foods and drinks exports might be main losers if Donald Trump imposes heavy tariffs.
Marco Forgione, director normal of the Chartered Institute of Export and International Trade, mentioned:
During the election, Trump pledged to implement a contemporary flat tariff on imported items of 20pc, rising to 60pc for these from China. This may reshape international commerce and, if projections from the IMF are to be believed, wipe out the equal of the French and German economies mixed from international GDP. Trump has argued the measures would reshore manufacturing on US soil.
Traders are predicting greater US inflation and rates of interest because of the Trump election.
The yield on 10-year US Treasury bonds rose to 4.457pc, in comparison with 4.298pc simply two days in the past, whereas the inventory market has jumped on positivity for company income.
David Kelly, chief international strategist at JPMorgan Asset Management, mentioned:
If he’s in a position to absolutely implement his agenda, it means greater deficits, greater tax cuts, and in addition, due to tariffs, greater inflation. The greater inflation and the larger deficits ought to push up long-term rates of interest.
Meanwhile, Andrea Scauri, a Swiss-based senior portfolio supervisor at wealth supervisor Lemanik, mentioned:
With Trump’s victory, you’ll get a lot stronger fiscal insurance policies in comparison with what might need been beneath a Democratic administration. This can have repercussions for inflation, and you may see that already with this morning’s rise in Treasury yields.
Wall Street’s beneficial response to the Trump presidency is as a result of buyers assume greater income are coming, an analyst has mentioned.
Daniel Casali, chief funding strategist at Evelyn Partners, mentioned markets have been reacting positively to the prospect of a “clear Trump victory” and Republicans controlling Congress. He mentioned:
The mixture of a clear sweep victory means tax cuts are possible over the approaching yr.
Wall Street’s most important measure of volatility has dropped by 20.2pc at the moment as Mr Trump’s decisive victory curbed a serious supply of uncertainty.
The so-called Vix – a preferred measure of volatility on the S&P 500 – dropped to its lowest degree since September.
The temper amongst buyers in direction of the US is enthusiastic this afternoon, with the S&P up 1.8pc, the Dow Jones up 3.1pc and the Nasdaq up 2pc.
UK borrowing prices are set to be reduce for the second time this yr, regardless of tax modifications and a Donald Trump victory within the US casting uncertainty over the long run path of rates of interest.
Julian Jessop, a number one economist, recommended that the election of President Trump and the Budget strengthened the case for the Bank of England to chop charges “to reassure markets”.
Most economists assume policymakers on the Bank of England will choose to cut back rates of interest to 4.75pc on Thursday.
Rates presently sit at 5pc after being reduce by 0.25 proportion factors in August, the primary discount since 2020, then stored the identical in September.
Since then, the most recent official information confirmed UK Consumer Prices Index (CPI) inflation fell to 1.7pc in September, the bottom degree since April 2021.
The dad or mum firm of Donald Trump’s social networking web site Truth Social misplaced $19.2m (£14.9m) within the final quarter, in accordance with an earnings report launched on the identical day he received again the presidency.
Trump Media and Technology Group reported late on Tuesday that a lot of that loss stemmed from greater than $12m in authorized charges, together with a decline in income, in accordance with the shock election day earnings report. Its inventory worth surged Wednesday however that was extra possible on account of Trump’s defeat of Kamala Harris to retake the presidency than on its revenue prospects.
President Trump created the corporate after he was banned from Twitter and Facebook following the Jan 6, 2021, Capitol riot. Based in Sarasota, Florida, it has been dropping cash and struggling to boost income.
Revenue for the three-month interval that ended on Sept 30 was simply over $1m, down practically 6pc from a yr earlier. Trump Media, primarily based in Sarasota, Florida, has misplaced greater than $363m up to now this yr.
Trump Media mentioned a few of its prices associated to the launch of its new TV streaming service known as Truth+.
Chief govt Devin Nunes mentioned the corporate “continues to explore additional possibilities for growth” reminiscent of mergers with different firms that “would benefit from Trump Media technology and branding”.
The firm mentioned in a regulatory discovering that its success relies upon partially on “the reputation and popularity of President Donald J. Trump”.
Shares are presently up greater than 6pc.
Investors have despatched down European shares at the moment amid worries that Donald Trump’s love of tariffs will harm continental companies.
The pan-European Stoxx 600 (which incorporates some British companies) is down 0.3pc, whereas the French Cac 40 is down 0.4pc and Germany’s Dax is down 0.9pc.
It’s rosier in London, nonetheless. The FTSE 100 is presently flat after being in optimistic territory many of the day, whereas the FTSE 250 is up 0.6pc.
Britain ought to copy Donald Trump’s tax cuts and negotiate with the brand new US president to keep away from new tariffs, a free-market economist has instructed The Telegraph.
Madsen Pirie, president of the Adam Smith Institute, mentioned:
The UK ought to put together to match the tax cuts prone to enhance the US economic system and may negotiate in earnest to defend UK exporters from attainable US tariffs.
During the election marketing campaign, Mr Trump mentioned:
We gave you the largest tax cuts in historical past, and we’ll do it once more – however even greater this time.
Chancellor Rachel Reeves has mentioned the UK would make “strong representations” to president-elect Donald Trump about the necessity to defend free commerce.
Mr Trump has mentioned he desires to extend tariffs on items imported from all over the world by 10pc, rising to 60pc on items from China.
At the Treasury Committee, Ms Reeves mentioned: “We’re not just a passive actor in this.
“It’s a trade relationship with the United States and we will make strong representations about the importance of free and open trade, not just between ourselves and the United States, but globally, and the US also benefit from those that access to free and open trade with us and other countries around the world, and it’s what makes us richer as societies to benefit from that.”
Asked by Tory former Treasury minister John Glen if it was life like to hunt to affect Mr Trump, the Chancellor mentioned: “We’ve got another couple of months before the inauguration.
“Obviously, you know, we will begin those conversations. We’ll prepare for different eventualities.
“I absolutely do not want to sound in any way sanguine. On the other hand, I am optimistic about our ability to shape the global economic agenda, as we have under successive governments.”
I hope you’ve discovered the stay updates on this weblog useful up to now and, at this level, I’ll hand you over to my ever keen colleague Alex Singleton.
US shares have surged because the markets acquired the understanding it craved, in accordance with analysts.
The S&P 500 and Dow Jones Industrial Average have hit intraday file highs, with inventory market giants like Amazon additionally rising to all-time peaks.
Ryan Grabinski, an analyst at Strategas, mentioned: “The biggest takeaway from last night is that we received certainty that the market craves.
“This will allow both business and consumer confidence to improve. Attention now should shift to the Fed meeting tomorrow.
“The 10-year is approaching the 4.5pc level, that’s the level risk assets ran into some trouble in the last 24 months.”
Oliver Blackbourn of Janus Henderson added: “For the moment, though, markets are focused on the upsides that come with certainty after an election and the prospect of pro-growth policy.”
Rachel Reeves has instructed MPs that Britain will proceed to have a “strong and healthy economic relationship” with the US beneath Donald Trump
The Chancellor mentioned it “is too early to start making changes to forecasts for our economy because of the election of a president in the United States”.
Appearing in entrance of the Treasury choose committee, she mentioned: “Our trading relationship, our economic relationship with the United States is absolutely crucial.
“The US are our single biggest trading partner. Trade between our two countries is £311bn a year so, of course, that relationship is crucial.
“And our special relationship obviously goes much beyond trade for our security and defence relationship.
“I’m confident that those trade flows will continue under the new President.
“Indeed President Trump has been President of the United States before and we continue to have a strong and healthy economic relationship.
“We as a Government will continue to make the case for free trade. We are an open trading economy. We benefit from that with our trading relationships with Europe, the Middle East, with Asia and of course with the US.
US stocks markets rocketed to record highs as trading began on Wall Street amid hopes for tax cuts after Donald Trump won the presidential election.
The Dow Jones Industrial Average surged 3pc to 43,501.56 in its biggest jump in two years, while the S&P 500 rose 2pc to 5,899.89.
The tech-heavy Nasdaq Composite rose by 1.8pc to 18,773.01.
Meanwhile, European stocks have given up earlier gains amid the threat of a tariff war from the Trump administration, which it is feared could impact growth.
The FTSE 100 was up 0.2pc, having earlier climbed as much as 1.6pc, while the Cac 40 in Paris, the Dax in Frankfurt and the FTSE MIB in Milan were all lower.
The eurozone is at risk of a “full-blown recession” after Donald Trump’s election victory, in accordance with economists.
Carsten Brzeski, economist at ING, mentioned: “A looming new trade war could push the eurozone economy from sluggish growth into a full-blown recession.
“The already struggling German economy, which heavily relies on trade with the US, would be particularly hard hit by tariffs on European automotives.
“Additionally, uncertainty about Trump’s stance on Ukraine and NATO could undermine the recently stabilised economic confidence indicators across the eurozone.
“Even though tariffs might not impact Europe until late 2025, the renewed uncertainty and trade war fears could drive the eurozone economy into recession at the turn of the year.”
In some UK company information, Mike Ashley has issued a authorized menace to Boohoo’s board because the battle for management of the quick vogue empire intensifies.
Mr Ashley’s Frasers Group printed an open letter to Boohoo’s board by which it mentioned it could “not hesitate to push for legal action” towards the corporate’s non-executive administrators in the event that they have been discovered to have breached their duties as board members. It mentioned this meant them appearing “honestly and in good faith in the way most likely to promote the success of the company for the benefit of its members as a whole”, in addition to pretty between shareholders.
Frasers is the biggest single shareholder in Boohoo with a 27pc stake. Boohoo co-founder Mahmud Kamani, who acts as its chairman, additionally holds a 12.5pc stake.
It comes as the most recent twist within the tussle for management on the British quick vogue large, which has escalated since Boohoo final month announced a review into its structure.
Boohoo had recommended this course of may contain promoting off varied manufacturers, together with Debenhams, Karen Millen and FairlyLittleFactor.
In the most recent letter, Frasers demanded that Boohoo verify publicly that it could not dump any manufacturers with out getting shareholder approval. It mentioned it could be “forced to consider [its] legal rights of redress” if the corporate disposed of belongings at a low worth or bought to companies managed by Mr Kamani.
Frasers wrote that the Boohoo board should “stop, once and for all, its utter disregard for shareholder views”.
Goldman Sachs has slashed its forecast for British and European financial progress subsequent yr amid fears Donald Trump will slap taxes on imported items from all over the world.
The funding financial institution now expects the UK economic system to develop by 1.4pc subsequent yr – down from earlier forecasts of 1.6pc – with the eurozone increasing by 0.8pc, a downgrade from earlier forecasts of 1.1pc.
Its economists warn that extra US tariffs on imports from Europe will hammer progress, notably if the outdated continent retaliates with border taxes of its personal.
That would knock 1pc from eurozone GDP, together with 1.1pc from trade-dependent Germany, and 0.7pc from Britain’s economic system.
Some of that may be compensated for by additional spending on defence, as European nations ramp up spending to attempt to change any decreased American help for Ukraine’s defence towards Vladimir Putin’s invasion.
“Taken together, our analysis points to a 0.5pc hit to real GDP in the eurozone, ranging from 0.6pc in Germany to 0.3pc in Italy, with a moderate 0.4pc hit to the UK. We expect the bulk of the growth hit to materialise between 2025Q1 and 2025Q4,” mentioned Goldman’s analysts, led by Sven Jari Stehn.
Christian Schulz at Citi mentioned the affect will come not solely from tariffs on items which European companies promote to Americans, but in addition from these which they ship to China, which faces a mooted 60pc tariff on the merchandise it sells to the US.
“EU goods exports were worth 3.1pc of EU GDP in 2023, with a trade surplus worth 1.1pc of GDP. Germany and Italy would be more exposed than the EU average; France and Spain less,” he mentioned.
The worth of gold has fallen at its sharpest tempo since April after Donald Trump received the US presidential election.
Bullion was down as a lot as 2.8pc to $2,664.07 because the Republican candidate’s victory despatched the worth of the greenback greater.
A surge within the US forex makes the valuable metallic costlier for a lot of international patrons.
Matthew Jones, valuable metals analyst at Solomon Global, mentioned: “This rally in the dollar and yields has put pressure on gold, which traditionally falls as real interest rates rise, reflecting reduced demand for safe-haven assets in the short term.”
The FTSE 100 stays up 0.8pc at the moment, having surged as a lot as 1.6pc after Donald Trump’s historic comeback election victory.
US-exposed firms stay one of the best performers, with Ashtead Group topping the index with good points of 6.1pc.
The FTSE 100 is boosted by a stronger greenback – which has loved its largest good points on international markets in 4 years – as most of its firms measure their income within the US forex.
On Wall Street, shares are poised to surge on the opening bell, with the Dow Jones Industrial Average on observe for good points of 3pc, the S&P 500 anticipated to rise 2.1pc and the Nasdaq heading for good points of 1.7pc.
Stocks have been boosted by expectations that Mr Trump will reduce taxes and enhance borrowing, stimulating demand.
Marvin Loh, senior macro strategist at State Street Global Markets, instructed Bloomberg TV: “We’ve been talking about this Trump trade for a while.
“The fairly aggressive market reaction shows that investors didn’t know what to put on, and now they know.
“A lot of us will be asking is which ones potentially have either a lot more to move or really does not yet reflect the type of administration.”
Donald Trump’s victory within the presidential election has reignited fears that he’ll unleash a contemporary wave of worldwide inflation.
Economists predicted tit-for-tat tariffs that may push up international costs. Analysts mentioned victory for the Republicans – together with throughout Congress – would also push down growth in Europe, extending the bloc’s period of stagnancy.
The dollar, US borrowing costs and shares all rose this morning in anticipation of Trump’s pledge to decontrol and reduce taxes.
Read how markets are expected to react.
The euro may hit parity with the greenback subsequent yr as tariffs anticipated from Donald Trump harm the European economic system, analysts have warned.
Chris Turner, head of markets at ING, mentioned “protectionism is a given and a negative for the currencies of the rest of the world” following the Republican’s victory, which has despatched the worth of the greenback surging.
He mentioned the “immediate target” for the forex can be a fall to $1.05, having dropped 2.1pc at the moment to $1.07.
He mentioned that issues can be worse for the euro if the Republicans fail to win the House of Representatives in Congress as a result of “world growth would not be able to enjoy as much support given the potential scaling back of prospective Trump tax cuts”.
He added that rising market currencies is also hit by the prospect of comparatively greater US rates of interest and weaker world commerce progress, notably Hungary, Brazil and central and japanese European currencies, which “look vulnerable”.
The euro is down 2.1pc towards the greenback following Donald Trump’s election victory, placing it on observe for its worst day since 2016.
Bas Kooijman, chief govt of DHF Capital, mentioned the euro had slumped to $1.07 amid “growing concern that a Trump presidency could lead to higher tariffs and adversely affect European economies”.
He mentioned: “The uncertainty surrounding trade policies and geopolitical tensions under Trump contributed to fears of disruptions in European trade.”
Daniela Sabin Hathorn, senior market analyst at Capital.com, mentioned: “The euro economy is seen as weaker which suggests more monetary easing from the ECB, weighing on the pairs ability to move higher.”
The pound stays down 1.3pc towards the greenback at $1.286, and is up 0.6pc towards the euro, which is value 83.3p.
Traders are decreasing bets on the Federal Reserve slicing rates of interest within the coming months as Donald Trump’s insurance policies are anticipated to gasoline inflation.
Money markets point out the Fed will nonetheless cut back borrowing prices at its subsequent assembly on Thursday, when the Bank of England can also be predicted to announce a fee reduce.
However, whereas bets on reductions in UK borrowing prices seem unchanged, the Fed is now regarded as much less prone to reduce charges within the months forward, in accordance with derivates trades.
John Hardy, chief macro-strategist at funding platform Saxo, there’ll possible be a change within the relationship between rates of interest in Britain and America.
He mentioned: “Fed decisions have tremendous influence because it is effectively the central bank for the world. So the price of borrowing US dollars, the interest rate, is the global price for borrowing money.
“With a Trump win, the first impulse would be for the US dollar to strengthen on the anticipation of stimulative measures and the Fed could end up cutting less.
“It would be reasonable to posit that if US rates and UK rates widen in the US dollar’s favour, it will contribute to shifts in the sterling-dollar exchange rate to the downside.”
The price of borrowing for the UK authorities has risen after Donald Trump’s victory raised considerations about greater inflation within the years forward.
The yield on 30-year bonds – the return the Government guarantees to patrons of its debt – has risen above 5pc for the primary time this yr.
The yield on 10-year bonds – often known as gilts – has risen barely to 4.54pc amid expectations that the US Federal Reserve will probably be pressured to maintain rates of interest greater.
Daniela Sabin Hathorn, senior market analyst at Capital.com, mentioned: “The bond market is going to be key over the coming days as it will give insight into how much bond traders are willing to push back on Trump’s suggested policies.
“If the Republicans are also confirmed to have taken victory in the House of Representatives – which is vital for tax policy – then we could see further volatility in bonds.
“His tax policies and tariff proposals are the key concern for bond markets, so we’ll have to see how much further pushback bond traders offer in the coming days. A key target for the US 10-year yield will be the 4.5pc mark, followed by 5pc.”
Donald Trump’s wealth is on observe to leap by $1.4bn (£1bn) as he heads to the White House, after the worth of his know-how firm soared.
Shares in Trump Media and Technology Group (TMTG), the proprietor of the social media platform Truth Social, climbed 35pc within the wake of early voting information that implies the Republican is on observe to win the US election.
Mr Trump owns a 58.9pc stake in Truth Social that’s now value $5bn. The stake is believed to make up the vast majority of his internet value.
Read how its valuation has swung wildly since its float.
The price of long-term borrowing within the US has jumped at its quickest tempo because the 2020 amid expectations that Donald Trump’s presidency will enhance the American nationwide debt.
The yield on 30-year US Treasuries has risen 23 foundation factors to 4.67pc.
Donald Trump’s speedy affirmation as the subsequent US president propelled the greenback greater and as buyers guess on tariffs on imports and tax cuts that might profit American enterprise.
US inventory markets rallied virtually by essentially the most in a yr in premarket buying and selling, whereas the greenback was set for its largest one-day leap since 2022.
Bitcoin hit file highs and Treasuries have been battered within the bond markets.
Mr Trump’s pledges to boost tariffs, reduce taxes and slash laws inspired buyers to dive into a variety of belongings that seemed prone to profit from such insurance policies.
Markets that might undergo beneath more durable tariffs, together with these in a few of the United States’ main buying and selling companions, bore the brunt of the sell-off.
The Mexican peso fell to its lowest in over two years, whereas the euro was set for its largest one-day drop since March 2020.
Philip Shaw, chief economist at Investec, mentioned: “It’s extremely early days to be drawing conclusions about what a Trump presidency and potential clean sweep might mean for the US and global economy and financial markets.
“Certainly, higher tariffs would involve greater inflation and less world trade growth.
“With stocks, one of the primary drivers is Trump’s promise to reduce corporate taxes for companies that make goods in America.
“And obviously, we’ve seen a bit increase in US stock futures and that’s carried through to European markets as well.”
Elon Musk is on observe to internet about $15bn (£11.6bn) from Donald Trump’s US election victory as buyers scrambled to place in place so-called “Trump trades” linked to the anticipated US election winner’s insurance policies.
Tesla’s share worth jumped as a lot as 14pc in premarket buying and selling, which might add about $113bn to its valuation, taking its complete market capitalisation to almost $900bn.
Chief govt Elon Musk has been a distinguished supporter of the Republican candidate within the presidential race and is anticipated to grow to be a distinguished adviser to the presumptive President Elect.
He helps Mr Trump’s plans to loosen laws which he thinks have held again the growth of his SpaceX and self-driving taxis.
The worth of oil has fallen as Donald Trump’s anticipated victory within the US election despatched the worth of the greenback surging.
Brent crude, the worldwide benchmark, was down 1.4pc at $74 a barrel after the Republican candidate received the essential swing states wanted to clinch the race for the White House.
Oil costs are measured in {dollars}, and a rise within the worth of the US forex makes it cheaper to purchase crude.
The greenback has risen amid expectations that Mr Trump will impose tariffs on imports, which is able to possible enhance inflation and pressure the US Federal Reserve to maintain rates of interest greater for longer.
He has additionally mentioned he’ll enhance manufacturing of oil within the US.
Kathleen Brooks, analysis director at XTB, mentioned: “Oil is falling as Trump promises to pump more oil, which will exacerbate the over supply in the oil market for the longer term.”
Investors have raced to purchase Ukrainian sovereign bonds amid hopes that the election of Donald Trump will result in a swift finish to its conflict with Russia.
Kyiv’s dollar-denominated bonds jumped by essentially the most of any rising market debt, in accordance with information compiled by Bloomberg.
Analysts assume it might be a sign that the battle in Ukraine may come to an finish. Mr Trump has pledged to finish the conflict “within three days” of taking workplace.
Global monetary markets have reacted “aggressively” to Donald Trump’s anticipated election for a second time as US president.
Saxo’s head of commodity technique Ole Hansen mentioned: “This outcome is close to forming a “Trump 2.0” or a “Red Sweep,” the place the Republicans may management each the White House and Congress, giving them substantial leverage in upcoming high-stakes tax and spending negotiations.
“So far, the results have driven the dollar to a one-year high, with the currencies suffering the biggest setbacks being the Mexican peso, the Japanese yen, and the euro, the two former affected by the potential divergence between the rate path of the FOMC and other major central banks.
“The US yield curve has bear-steepened, with long-term yields rising more quickly than short-term yields, as concerns grow that Trump’s unfunded tax cuts and tariffs on imports might reignite inflation fears, potentially slowing the pace and depth of future US rate cuts.”
In the debt market, US authorities borrowing prices have surged. Treasury yields shot to four-month highs.
Yields on 10-year Treasury bonds – the return the federal government guarantees to pay patrons of its debt – jumped to 4.47pc, breaking final week’s prime of 4.39pc,
Two-year yields climbed to 4.31pc from 4.19pc amid expectations that Mr Trump will enact extra inflationary insurance policies.
Mark Haefele of UBS mentioned the leap in yields was “in anticipation of higher nominal GDP growth and higher fiscal deficits”.
However, authorities borrowing prices fell in Europe as buyers snapped up bonds amid considerations that Mr Trump’s inflationary tariffs will harm progress.
The yields on UK, German and French bonds have been all decrease, with the hole between US and European debt prices widening.
The largest gainers on the FTSE 100 seem like US going through shares, with Ashtead main good points.
The worldwide constructing gear rental firm, which has robust operations within the US, was up 6.8pc.
InterContinental Hotels was up 5.7pc, whereas playing large Entain, which has expanded its American operations, was up 4.9pc.
Tesla shares surged as a lot as 12pc in premarket buying and selling, as buyers scramble to place in place so known as “Trump trades” linked to the anticipated US election winner’s insurance policies.
The electrical automobile maker’s chief govt Elon Musk has been a distinguished supporter of the Republican candidate within the presidential race.
He helps Mr Trump’s plans to loosen laws which he thinks have held again the growth of his SpaceX and self-driving taxis.
Shares in European clear power teams plummeted as Donald Trump claimed victory within the US presidential election.
The world’s largest offshore wind developer Orsted fell 9.5pc whereas wind turbine makers Vestas and Nordex traded down 8.7pc and three.4pc, respectively.
Trump has vowed to scrap offshore wind initiatives by means of an govt order on his first day in workplace. The Republicans have taken management of no less than one chamber of Congress and will take each.
Shares in German utility RWE, which additionally has wind belongings, fell 2.3pc, whereas Portugal’s EDP Renovaveis traded 6.8pc decrease.
The FTSE 100 has leapt greater after Donald Trump mentioned he has received a “magnificent victory for the American people” within the US presidential election.
The UK’s blue chip inventory index was 1.3pc greater whereas the midcap FTSE 250 jumped 1.8pc after the Republican candidate took the essential swing states of North Carolina, Pennsylvania and Georgia forward of Democrat candidate Kamala Harris.
In company information, Marks & Spencer surged by 4pc after it notched up a better-than-expected leap in half-year income because of buoyant meals and clothes buying and selling.
Pub group Wetherspoons was up 2pc after gross sales grew about 6pc within the 14 weeks to November 3, in contrast with the identical interval final yr.
Boss Tim Martin mentioned this marked “record” gross sales for the primary quarter of the group’s monetary yr.
However, Persimmons sank by 5pc to drop to the underside of the FTSE 100 after it warned it confronted rising price inflation and the affect of latest constructing laws and National Insurance will increase introduced within the Budget.
Prime Minister Sir Keir Starmer has congratulated Donald Trump on his “historic election victory” and mentioned that “as the closest of allies, we stand shoulder to shoulder in defence of our shared values of freedom, democracy and enterprise”.
At the European Commission headquarters, the “Trump task force” is tough at work drawing up contingency plans for a US-EU commerce conflict and Washington cancelling aid for Ukraine.
Read his article on how diplomats have been preparing for a ‘brutal shock for Europe’ should the Republican win Tuesday’s US election.
French president Emmanuel Macron has congratulated Donald Trump on profitable the US election.
He wrote on X, previously Twitter: “Congratulations President Donald Trump.
“Ready to work together as we have done for four years. With your convictions and with mine. With respect and ambition. For more peace and prosperity.”
UK shares lurched greater after Donald Trump mentioned he would usher in “the golden age of America” as he seems poised to win the US presidential election.
The FTSE 100 opened greater by 0.8pc to eight,233.47 whereas the midcap FTSE 250 gained 1.4pc to twenty,656.66.
Stock, forex and bond markets are reacting decisively amid “relief” that the US presidential election seems to have delivered a decisive outcome.
Neil Wilson, chief market analyst at Finalto, pointed to surging markets on Wall Street, with the Russel 2000 index of smaller firms surging by 4pc to the very best in three years in premarket buying and selling.
He added that the winners from the election evening can be Elon Musk, Tesla, bitcoin and the greenback, whereas the losers can be China, left-wing European governments, rising market currencies and tariff-exposed shares.
He mentioned: “Stocks are probably less sensitive to the Trump Trade than the FX space and this has been borne out so far – a lot more orderly than 2016 – partly because Trump is known and partly because it was not a surprise!”
Donald Trump profitable the US election “will adversely affect growth in Europe” because the Republican candidate is anticipated to place in place tariffs on imports, analysts have warned.
Andrzej Szczepaniak of Nomura mentioned: “The European Commission is expected to retaliate like-for-like, which could mean higher inflation in the euro area – or, as manufacturing firms’ pricing power is so diminished, as we have been flagging for some time, firms could be forced to absorb these higher costs, which in turn may result in some firms shuttering and unemployment rising, thus weighing more heavily on growth.”
He added that the European Cental Bank would possible stay “very cautious” and chorus from a bigger half a proportion level rate of interest reduce in December.
US inventory markets are extending their enormous good points in premarket buying and selling after Donald Trump declared victory within the 2024 US presidential race.
The S&P 500 was up 2pc whereas the Nasdaq gained 1.7pc forward of the opening bell this afternoon, whereas the Dow Jones Industrial Average was up 2.2pc.
Donald Trump mentioned there was “no other path to victory” for Kamala Harris after the Republican candidate received the US swing state of Pennsylvania.
He mentioned profitable the favored vote was “very nice” as he addressed a rally of supporters at West Palm Beach, Florida, including: “It’s much easier doing what the networks did, or whoever called it, because there was no other path.
“There was no other path to victory. We also have won the popular vote. That was great.”
Peter Esho of Esho Capital mentioned: “The markets are scrambling to figure out what happens next, but for the time being, the market is pricing in a higher growth and higher inflation outlook.”
Donald Trump has claimed he has received the US election in a “magnificent victory for the American people” and mentioned he’ll “help our country heal”.
“America has given us an unprecedented and powerful mandate,” Donald Trump mentioned as he hailed Republican victory within the Senate.
The swings in markets is “probably going as you would expect” as Donald Trump seems poised for victory within the US presidential race, in accordance with analysts.
The query seems to be whether or not there’s a “red sweep” whereby the Republicans win management of the White House, the House of Representatives and the Senate.
Deutsche Bank analyst Jim Reid mentioned: “One thing to consider is that if there is a split Congress, you could argue that tariff policy becomes the priority assuming Trump wins, as he won’t be able to get his tax policy through without negotiations.”
Donald Trump’s wealth is on observe to surge by about $400m after shares in his social media platform rose within the wake of his anticipated election victory.
Trump Media & Technology Group shares have risen by about 10pc in after hours buying and selling, boosting the worth of his 52.9pc stake within the proprietor of his Truth Social platform.
Stock indexes in Europe and the US are anticipated to open greater as Donald Trump was projected to win the US presidential race by Fox News.
The FTSE 100 in London is on observe to rise by 0.8pc, whereas the Cac 40 in Paris is on target to leap 0.5pc. The Dax in Frankfurt is poised for a 0.2pc enhance.
On Wall Street, the Dow Jones Industrial Average is anticipated to rise 1.7pc, whereas the S&P 500 is up 1.6pc and the Nasdaq 100 up 1.5pc in premarket buying and selling.
The greenback rocketed in in a single day buying and selling as Donald Trump received key states and appeared to be on the path to victory within the US presidential election.
The US forex surged by 1.2pc towards the pound, which is value $1.287, its lowest degree in two months, as buyers guess that the Republican candidate will return to the White House.
In the debt market, authorities borrowing prices surged. Treasury yields shot to four-month highs as some betting websites closely favoured Trump after he received the battlegrounds of North Carolina and Georgia.
Yields on 10-year Treasury bonds – the return the federal government guarantees to pay patrons of its debt – jumped to 4.47pc, breaking final week’s prime of 4.39pc, whereas two-year yields climbed to 4.31pc from 4.19pc amid expectations that Mr Trump will enact extra inflationary insurance policies.
Bitcoin climbed as a lot as 8.5pc to succeed in a file excessive of $75,060 because the self-styled “Crypto President” was thought to have a bonus in Pennsylvania, Michigan and Wisconsin.
Thanks for becoming a member of me as we cowl the market response to the US presidential election.
The greenback has surged towards the pound and different main currencies whereas bitcoin has hit a brand new file excessive after Donald Trump received the swing states of North Caroline and Georgia.
The price of US authorities borrowing can also be rising amid expectations that the Republican candidate will enact extra inflationary insurance policies if he return to the White House.
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Share costs, the value of bitcoin and bond yields surged as markets awaited updates on the result of the US presidential election.
In after hours buying and selling, the S&P 500 on Wall Street gained 1.1pc and that for the Dow Jones Industrial Average additionally was up 1.3pc. The Nasdaq Composite was 1.1pc greater.
Bond yields additionally surged, with the yield on the 10-year Treasury climbing to 4.47pc from 4.28pc on Tuesday.
In Asian share buying and selling, Japan’s Nikkei 225 index gained 2.3pc to 39,341.44 whereas the Kospi in Seoul edged 0.2pc decrease to 2,570.94.
Australia’s S&P/ASX 200 rose 0.9pc to eight,207.50.
Hong Kong’s Hang Seng index fell 2.7pc to twenty,439.58, ending a three-day rally, as buyers sought safe-haven belongings amid the uncertainties surrounding the US election.
The Hang Seng Tech Index slipped 3.3pc, whereas the Shanghai Composite index edged 0.1pc greater, to three,388.70.
The worth of bitcoin jumped 7.7pc to $75,255.00, as buyers guess on a victory for Trump, who has expressed help for cryptocurrencies.
On Wall Street on Tuesday, the S&P 500 index rose 1.2pc, closing at 5,782.76, the Dow Jones Industrial Average added 1pc, to 42,221.88, and the Nasdaq Composite jumped 1.4pc, to complete at 18,439.17.
