US Presidential election 2016: Global markets "in a bloodbath" as Donald Trump looks set for White House victory over Hillary Clinton

 
Caitlin Morrison
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Crowds Gather In New York To Watch Election Results From Across The Country
A Hillary Clinton supporter reacts to the results (Source: Getty)

As Donald Trump looks set to be named President of the US, analysts have issued dire warnings on global markets - with one expert describing a "bloodbath" as the election results roll in.

Trump is currently leading the race for the White House with 244 electoral college votes against Hillary Clinton's 215.

The Mexican peso, seen as a "Trump thermometer" during this election cycle, has plunged to a record low, and Asian markets have tumbled.

This is what the analysts have to say:

Big Bloodbath

"We are experiencing a similar night to the Brexit," said London Capital Group senior market analyst Ipek Ozkardeskaya.

"The mis-priced Trump victory is taking its toll on the global markets. The global markets have been a big bloodbath as the Republican candidate, Donald Trump, leads the race to the White House.

"European traders had an early wake-up call to a heavy risk-off market. The safe-heaven assets, such as Swiss franc, the Japanese yen and gold are expected to remain in demand.

"The knee-jerk plunge in emerging market currencies, as Turkish lira, South African Rand and Brazilian Real, could be opportunities for short-term corrections. We recommend to stay away from a panic rush into the US dollar, as the Fed December rate hike odds fell to 50 per cent."

Sunderland moment

Naeem Aslam at Think Markets said: "Things are certainly have started to look a lot like Brexit. This reminds us of a Sunderland moment as peso and yen were moving in a different direction earlier, but look at them right now and it appears that you are looking at a completely different derivative. We are glued to our screens and paying attention to them very carefully."

He added: "Trump winning the Florida state has strengthened the game for him. This is a major bombshell state for him and the payoff for his labour is massive. He needed to win this state. Investors have shown the market reaction in a colour which you may not like.

"The market reaction can be seen by looking at the price of gold which is trading higher. The S&P500 futures have also moved sharply lower and things have started to look a more like Brexit. Deja vu once again perhaps."

Aslam said there are likely to be "a lot of emergency meetings by central banks if Donal trump wins the election and if the market turmoil continues like this".

Trump's rhetoric

“The extent of further fallout over the trading day today will depend to some degree on the rhetoric from Trump," said Derek Halpenny, European head of global markets research at MUFG.

"Does he make comments about renegotiating NAFTA, scrapping other trade deals and threatening China? Does he make comments in regard to economic policy that spooks the UST bond market? The drop in 10 year yields is much more modest, suggesting increased concerns over fiscal expansion fuelling inflation expectations."

Halpenny added: "This will no doubt be cited as another example of Brexit – disaffected voters who feel their voice is not being heard and when the dust settles, central bankers will in all likelihood conclude that QE and policies that slowdown government reform are part of the problem. This victory certainly will at some point start to put upward pressure on long-term yields."

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