Halister News

(Bloomberg) -- Under Republican sweep, expect USD to strengthen vs EM and weaken against other major peers amid potential trade wars, potential contractionary policies, Barclays economist Michael Gapen says in phone interview.

• Market reaction not overdone, question will be how long risk-off moves last
• “It’s up to the winner to soothe markets”
  • If Trump signals priority for fiscal expansion, markets can reverse quickly; there is a set of Trump policies -- restricting trade and capital flows, deporting certain immigrants, repealing ACA -- that are contractionary
  • Risks would depend on what policies Trump prioritizes and when and how all fits together