US election 2016

Bizarre trading dynamics conspired to save over-confident trades backing a Hillary Clinton victory in the US presidential election, with a ‘Trump bounce’ in the aftermath curtailing volatility and sending many short-volatility plays back into the money. But the shock of the Republican victory adds to that of the Brexit vote in June and has jolted market complacency on other political events in the coming months.

It wasn’t just pollsters that were left scratching their heads this week in the US as syndicate bankers were also expressing surprise at the resilience of domestic credit markets following the election of Donald Trump as their president.

Donald Trump’s shock success in the US presidential election met initially staunch resistance from EM asset prices. But dealers apportioned the response to technical factors underpinning the market and warned that the long term impacts of the election result could be very different.

The FIG market showed poise following Donald Trump’s shock victory in the US presidential election this week, with new issuance restarting within a single day. But the result has not passed without consequence, as market participants prepare themselves for further political turmoil.

The European high yield market this week proved that it has learned at least one lesson from its Brexit experience: the unexpected does not mean market shutdown.

One thing needs to be made clear about a Trump presidency in the US: the president-elect is not a Wall Street Republican and he did not rely on the support of bankers to win the White House.

The EM primary bond market took just one day to digest Donald Trump’s unexpected ascent to the US presidency before new issuance resumed with a Gazprom bond. But uncertainty about what Trump will actually do could lead to volatile markets, increasing the cost of any issuance.

Two corporates hit the new issue market on Thursday, one clinching a 0% yield and the other paying only a single digit new issue premium, despite volatility in rates markets.

As the end of 2016 approaches, borrowers are turning to the green market for their remaining funding, with a pair of SSA borrowers returning to the syndicated market for socially responsible investment products on Thursday.

The US presidential election drove the Asian fixed income market to a near standstill this week and for most borrowers, Donald Trump’s victory has likely stalled plans for upcoming issuance. But Chinese property developers and local government financing vehicles, some of the names most desperate for funds, may keep the market moving for the rest of the year. Morgan Davis reports.

Volatility has crept up in emerging markets as bonds across the asset class sold off again on Thursday, as they had in the immediate aftermath of the US election results, despite a recovery later on Wednesday.

Lat Am bond market participants held varying views on just how bad the market reaction to Donald Trump’s victory in the US elections had been on Wednesday, but most agreed that issuance plans across the region would be on hold for a while as debt prices tumbled.