Fixed Income Update 07 Nov 2024
KBVS WEEKLY FIXED INCOME UPDATE
Thursday, 7 November 2024
The Return of Generation “X”
Trump has won the US presidential election, along with the Republican Party securing control of the Senate and Congress. This outcome is likely to drive forward policies related to:
• Immigration,
• Tariffs, and
• Budget policy.
These changes are anticipated to be implemented soon after the inauguration on Jan ‘25. This situation raises concerns about potential volatility in the US fiscal stance, given Trump’s more impulsive style. For this reason, it may be wise to reinstall 'X' to stay informed on Trump’s unexpected policy announcements.
Emerging markets may face short-term pressure due to the likelihood of Trump’s reflationary policies, including immigration restrictions, Trump Tariffs, tax cuts, an increasing budget deficit, and pro-growth initiatives. These measures are expected to push the DXY to high levels, leading to depreciation in global currencies. However, the structural reforms (inward-focused policies) being undertaken under the new administration should be acknowledged for helping mitigate global risks.
Regards,
KBVS Research Team