《TAIPEI TIMES 焦點》 US ELECTION: Investors exuberant as Trump signals shift from austerity

/ Reuters, LONDON

European stocks yesterday rose following extraordinary gains in Asia and Wall Street was set to open higher again, as exuberance shot through markets and reversed initial dives in reaction to the election victory of US president-elect Donald Trump.

Investors focused on Trump’s priorities — including tax cuts and higher infrastructure and defense spending, along with bank deregulation — and set aside for the moment longer-term worries about whether he will slap punitive tariffs on Chinese and Mexican exports, risking a global trade war.

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European stocks hit a two-week high, with the pan-European STOXX 600 Index up 1.3 percent in early dealings before trimming gains to about 0.7 percent, and “safe haven” government bonds sold off after Trump suggested he would spend billions on infrastructure.

This marked an abrupt change from the sharp recoil on markets on Wednesday after Trump’s win.

The US dollar also jumped to its highest level in two weeks.

However, amid the optimism came a warning from PIMCO, the world’s largest bond fund, that volatility is likely to be high in the immediate future.

Investors generally saw signs that Trump is likely to ditch the budget austerity policies that Western governments have pursued since the 2008 global financial crisis after he takes over in January.

In a remarkable session for Japanese shares, the Nikkei yesterday jumped 7 percent at one point after sinking 5 percent on Wednesday.

Gains in Europe, where markets had already started to recover on Wednesday, were more modest.

The moves were led by Wednesday’s sharp rises in US Treasury yields.

The 30-year Treasury bond yield gained almost 25 basis points in its sharpest rise in more than five years; yields on the 10-year note climbed 21 basis points to breach the 2 percent mark for the first time since January.

Investors saw US$337 billion wiped off the value of securities that comprise an index of global bonds in a single day on Wednesday as Trump’s election sparked concern his plan to boost economic growth will lead to a surge in inflation.

The selloff spread further into European bonds yesterday, as traders caught up with moves in US Treasuries.

Speculation that Trump’s victory and a Republican-led Congress will lead to a wave of spending, spurred the likelihood that inflation will pick up in coming months, which would in turn erode the value of bonds.

Additional reporting by Bloomberg

新聞來源：TAIPEI TIMES