Oil Hasn’t Recovered Yet and is Still Down
So what started as a pre-market sell-off of epic proportions, ended up as a stock market rally. European and US markets all ended up more than one percent, but the big gainer overnight has been the Nikkei, which at the time of writing is up more than 6.5%! This is because it has had a lot of making up to do following the sell-off it saw in the early hours of yesterday morning, when the world realised what was ahead of it.
We're not entirely sure how the market has done a U-turn from the perception of doom that The Donald was thought to be bringing with him if he were to make it to the White House, but we'll take it – in the knowledge that the market might well be climbing higher up the cliff face before it falls off it.
For those that need a reminder of what he has in store for his first 100 days of office, NPR has the article and its worth a read, because a lot of this stuff isn't exactly going with the flow. There's said to be some conflict with Senate leader Mitch McConnell as to the priorities of what's being proposed – including infrastructure spending, which apparently isn't as high on his list as it is on Trump's – but if this list is to be implemented there's certainly a lot of work to be done.
One thing that won't be done before Obama leaves office is the Trans Pacific Partnership. That deal isn't going to be debated before the end of the year, so there's little to no chance of that going through. Though, to be fair, Hillary wasn't a massive fan of the deal anyway, so it might have been difficult to push it through with either outcome
In Europe, politicians must be getting worried about elections next year. France, Germany and Holland have elections scheduled and Italy might do too, if Renzi doesn't get his way over his political reform referendum in a few weeks time. In each country there are right wing or anti-establishment parties that will have picked up a lot of momentum from yesterday's outcome.
One thing that hasn't recovered overnight is oil, which is still down around the $45 barrel mark. There's been a lot of talk about reinstating mothballed exploration projects once the price becomes viable, but with Trump's plans to ramp up resources production within the US, a price north of $50 again might be a long shot.
Today we're looking at another range bound day in FX markets. European equities are likely to trade higher again today off the back of Asia's momentum and then maybe that carries through into the US.
Have a great day
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