After Donald Trump's unexpected victory in the U.S. presidential election, investors may refocus in the coming week on the health of the world economy and any signs that years of rock-bottom interest rates and fiscal austerity are coming to an end. Ciara Lee reports.
After the political earthquake of Donald Trump's unexpected victory in the U.S. election, investors may refocus this week on the health of the world economy It's relied for years on cross-border trade and migration - Trump's campaign took a fiercely protectionist position on both. (SOUNDBITE) (English) SENIOR MARKET ANALYST AT IG GROUP, CHRIS BEAUCHAMP, SAYING: "What does it mean for trade deals? What does it mean for the U.S. relationship with key partners like China and the EU? And I think that is the difficult thing to work out at the moment, and I think people find themselves in a state of not quite shock, but just in a position where they haven't the old assumptions of the way of looking at the world where central bank policy has now been disrupted." Markets have so far mostly shrugged off the election result. Even the long-held view that the Federal Reserve will raise rates next month hasn't budged. Fed Chair Janet Yellen's testimony to Congress on Thursday may set the stage for what's to come. (SOUNDBITE) (English) SENIOR MARKET ANALYST AT IG GROUP, CHRIS BEAUCHAMP, SAYING: "Just to get a bit more of a hint of what their thinking is and how they may or may not have changed in the wake of Wednesday's developments." Trump's promise to cut taxes and upgrade the country's infrastructure could provide a boost to both growth and prices. Sovereign bond markets are already out of the blocks in pricing in a rise in inflation expectations around the world. Starting on Monday, it will become clearer how industrialised economies fared in the third quarter. Reuters polls expect growth largely held steady in the euro zone despite a slowdown in Germany, and picked up slightly in Japan. Britain's Prime Minister Theresa May is scheduled to travel to Berlin on November 18th. She's hoping to get preliminary talks underway to help the UK smoothly navigate its way out of the EU.