by Chris Becker
One of my favourite movies is Lord of War, mainly because the way a certain dictator called it a “bath of blood” instead of a bloodbath. And today on risk markets as the inevitable and indigestible truth that Trump is to be elected President of the Idiocracy, the shock waves in the bath of blood are only just being felt in Europe and then the US later tonight.
Basically, USD surged against AUD, but was dumped against everything else as the results came in:
Why? Because rate rises are completely off the table now as the Fed will have to hold fire going into a tumultous 2017. Bond markets have cratered as well and that will be the key market to watch tonight, even though S&P futures are limit down, off by 4%!!
Is this Brexit 2.0 or something more sinister? For foreign markets, yes. For US domestic markets, probably not. Having a hand grenade in the Oval Office will affect the world more than ordinary Americans – so watch for continued volatility to reign.
A great time for short sellers and gold bugs, not a great time for America.
The ASX200 finished down 2.1%, almost cracking 4% down during the session (and going up 1% as I stepped out quickly for a coffee – always happens that way!!) This takes it down almost to the June lows, setting up for a long bear market going into Christmas:
The data calendar tonight – well who cares, it will be all about repositioning trillions of dollars in risk assets as the Trump-tsunami rolls over Europe and into the NY open. Stay safe!