NEW DELHI: The upcoming second term of the US President Donald Trump (Trump 2.0) will be beneficial for the equity market and US Dollar while it is negative for the bonds markets, according to a report by Union Bank of India.
The report compares two timelines of before Trump and from January 2 to November 4 and from November 4 to December 31. The second period reflects changes following the US Presidential election held on November 5-6, under the hypothetical scenario ‘World changed under Trump 2.0’. It said, “Trump 2.0″: +ve for Equity, Dollar and -ve for Bonds”.
The report also said, “US exceptionalism theme expected to stay key macro and market driver in 2025, Trump 2.0 to keep Fx markets volatile this year; 20th Jan’25 joining date in focus”.
In the commodities category, gold experienced gains in the earlier period but corrected marginally post-election. Oil and copper showed modest increases initially but surged after November 4. Aluminium gave good returns in the first period of this year and corrected marginally after the elections.
While cotton demonstrated a negative trend only this year. In equities, global markets reflected diverse trends. The US Dow, German DAX, and UK FTSE registered notable gains this year and surged further post-elections. Japan’s Nikkei saw a strong recovery post-elections, which was in negative earlier, while India’s Sensex experienced notable gains before the US elections, the index corrected after TRUMP 2.0.
The report also noted that in the bonds market, US 10-year yields saw modest changes, while German 10-year bonds declined post-elections and UK 10-year bonds registered marginal gains. Japan’s 10-year bonds also recorded an uptick, whereas India’s 10-year bonds declined this year.
In currencies, the US Dollar Index (DXY) strengthened significantly after November 4, reflecting a shift in sentiment. The euro and pound declined sharply post-election. The yen depreciated after November 4, while the Indian rupee displayed limited fluctuations in negative.
Overall, the election results appear to have driven substantial market shifts, particularly in commodities, equities, and currencies. (ANI)