Markets at the mercy of politics
One would have thought that the toughest obstacle for Donald Trump would have been limited to the presidential election win. Yet, two months into his tenure, Trump has failed to gather the needed support in congress to implement his proposed health care reforms on the previously set bill implemented by Barack Obama.
As one of the main proposals in his electoral campaign, it comes as no surprise that investor sentiment has subsequently retreated. Financial markets over the past months, most notably since the presidential outcome have priced in proposed Trump reforms from lower corporate taxes to infrastructural fiscal spending.
The healthcare proposal vote last Friday, to revoke what became known as Obamacare since 2012, was a big test to Trump’s presidency. The failure to implement the reform, following a vote in congress, led investors to anticipate similar scenarios for the other proposed Trump policies that in turn have to go through congress.
Markets have in fact retreated since Friday’s vote with the US dollar depreciating against a number of currencies and equities selling off, following the optimism over recent months of the pro-business Trump agenda.
Gold, sovereign...