Global stock markets showed mixed performance on Wednesday as investors expressed concerns over the potential impact of Donald Trump's presidency on both the Chinese and global economies. There are growing fears that Trump's policies could lead to a resurgence of inflation in the United States. The anticipation of increased prices due to Trump's proposed tax cuts, import tariffs, and regulatory easing has bolstered the dollar, which has been on an upward trajectory since the Republican's victory in the recent election.
Attention is now focused on the upcoming release of key US October consumer price data, expected later in the day. Analysts predict a slight increase from the previous month's figures. 'This is particularly relevant given the worries that Trump's tariff policies will lead to inflation,' noted Susannah Streeter, head of money and markets at Hargreaves Lansdown. 'If prices are already showing signs of instability, expectations will grow that Trump's threats might be softened.' The data will be closely scrutinized to gauge the Federal Reserve's intentions regarding borrowing costs when it convenes again in December.
Major European indices saw modest gains around midday on Wednesday. Shares of Siemens Energy surged by over 15 percent following the German company's positive annual results and improved outlook. Conversely, Asian markets mostly closed lower as Trump appointed known China hawks to key cabinet positions, stoking fears of another damaging trade war between the two economic giants.
'We anticipate the effective tariff rate on US imports from China to climb to about 40 percent,' stated Harry Murphy Cruise from Moody's Analytics. 'This would essentially double the current rate,' he explained to AFP. 'It's probable that the threat of further tariffs, potentially reaching the proposed 60 percent, would be employed as a bargaining chip.' Cruise added, 'China would almost certainly retaliate by imposing tariffs of a similar magnitude.'
The threat of renewed conflict comes as Beijing grapples with stimulating domestic growth. Despite unveiling a series of measures at the end of September, traders were left unimpressed. China's state media reported on Wednesday that Beijing had introduced a series of tax policies aimed at revitalizing the country's struggling property market. Meanwhile, Wall Street provided a negative lead, with its three main indices ending in the red on Tuesday as investors took a pause from a week-long rally that had pushed markets to new record highs. Traders are also closely monitoring bitcoin, which came close to breaking the $90,000 mark for the first time on Tuesday, driven by Trump's pro-crypto campaign promises.
Source link: https://www.khaleejtimes.com
