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進入《TAIPEI TIMES》 Trump result prompts market warning
A man walks past an electronic stock board showing Japan’s Nikkei 225 index at a securities firm in Tokyo yesterday. Photo: AP
’TECH VULNERABLE’: Global CIO Office’s CEO said that the COVID-19 result might prompt a 10 percent correction in US equities that would probably drag Asia down
/ Bloomberg
Investors yesterday warned against higher volatility and a potentially deeper selloff in risk assets after the news of US President Donald Trump and his wife, Melania, testing positive for COVID-19 roiled global markets.
US equity futures slumped as much as 2 percent and Asian stocks also declined following the announcement.
The US dollar and the yen climbed as the news stoked risk aversion.
VIX October futures jumped as much as 12 percent.
“Markets hate uncertainty and this ticks all those boxes,” Oanda Corp senior market analyst for Asia-Pacific Jeffrey Halley said. “Not because of the president alone, but because this potentially means it has spread to the upper-level echelons of the government in the US.”
“This will induce nervousness in the markets and we could see a 10 percent correction in US equities that will likely drag down Asian equities for the balance of the year,” Global CIO Office chief executive officer Gary Dugan said. “Longer-term, people will see a sharper contrast between Asian and US equities. Asia has political stability and strong technology companies in the north. For people looking to allocate globally, this just makes Asia more attractive.”
“There will be another selloff,” Tellimer analyst Nirgunan Tiruchelvam said by telephone. “The potential selloff can last for few days. Tech will most vulnerable because there valuations are stretched.”
“It might also impact [Donald] Trump’s chance of getting elected. People are going to go for gold and other safe assets,” Tiruchelvam said.
Investors would move into haven positioning, Halley said.
“Investors should hedge themselves against S&P,” said Justin Tang （鄧文雄）, the head of Asian research at United First Partners in Singapore. “Most people may still be having their hedges on given what happened in March. A lot depends on what happens in next seven days.”
“If Trump goes to ICU, it is going to be a big problem, but if he is asymptomatic, that volatility may get contained,” Tang said.
“This will further lead to dollar weakness as it comes on top of the likely prospect that US stimulus package won’t get approval until after the election,” Shinkin Asset Management chief market analyst Jun Kato said. “This may also pressure the Fed [US Federal Reserve] to deliver a more dovish tone that would cap US yields and weigh on the dollar.”
The yen might climb to ￥104 per US dollar, Kato said.
Risk aversion “will boost the dollar’s haven appeal, keeping emerging currencies on the back foot,” StoneX Group currency trader Mingze Wu （吳明哲） said.
“As this creates uncertainty with the US presidential election in focus for the market, credit spreads may widen initially and market likely remains volatile in the weeks ahead,” said Ek Pon Tay, portfolio manager for emerging-market fixed income at BNP Paribas Asset Management. “As and when this event risk recedes and/or valuations correct further, I’m likely to have a more positive stance on the market and to add risk.”
Trump is likely to take more steps against China to maintain support from his voters, which could lead to a series of market aftershocks, Nordea Investment Funds senior macro strategist Sebastien Galy said.
新聞來源：TAIPEI TIMES
