Asian markets extend losses as TRUMP fears build

Wednesday, November 13, 2024 - Asian markets slumped on Wednesday, November 13, as investor worries intensified over the potential economic impact of Donald Trump’s presidency, with fears that his policies could reignite U.S. inflation and disrupt global markets. Since Trump’s re-election last week, market analysts have flagged concerns about his tax cut proposals, import tariffs, and regulatory rollbacks potentially driving up prices, which has already boosted the dollar.

The dollar continued its rally, reaching a one-year high against the euro and approaching 155 yen, as traders scaled back expectations of Federal Reserve rate cuts. Markets now anticipate only two cuts by June, compared to four previously forecasted, reflecting traders’ responses to Trump’s anticipated economic policies.

Bitcoin, meanwhile, approached $90,000 before settling just above $88,404 as speculators rallied around Trump’s pro-crypto campaign promises, sparking predictions that the cryptocurrency may soon surpass $100,000.

After an initial rally following Trump’s win, Asian markets have since reversed course amid news of his cabinet appointments, which have included several known China hawks. This development has fueled fears of a renewed trade conflict between the U.S. and China, stoking uncertainty as Beijing works to bolster its own economic growth. Despite a slew of measures announced in September, Chinese markets have reacted cautiously, with investors disappointed by a lack of fresh initiatives.

Asian equities, from Hong Kong, Shanghai, and Tokyo to Seoul, Sydney, Singapore, and beyond, all closed in the red. The pullback came on the heels of Wall Street’s recent declines, where major indexes ended a rally that had set fresh records.

Looking ahead, market focus now shifts to the upcoming U.S. consumer price index data for October, expected to show a slight increase from the previous month. Analysts will closely scrutinize the data to gauge the Federal Reserve’s likely approach to interest rates ahead of its December meeting, where it could consider adjustments to borrowing costs following its recent rate cuts of 25 basis points in November and 50 basis points in September.

As markets remain volatile, global investors continue to monitor Trump’s policy announcements closely, bracing for potentially significant impacts on the international economic landscape.