President-elect Donald Trump’s talk of trade tariffs has decreased positive sentiment for emerging markets, and the continually-rising U.S. bond yields have pulled money out of Asia, leading traders to question exactly how Trump’s proposed policies will impact on economies outside of the United States. Though Trump’s policies seem decidedly protectionist towards the U.S., skeptics question whether or not he will really come through on his promises which could send shocks throughout the global markets. At the Reuters Global Investment Outlook Summit held last week, it was revealed that investors withdrew a record $6.4 billion from emerging market bond funds tracked by JP Morgan – a full 10 percent of investments. This reversal came after last year’s Summit which predicted an uptrend in emerging markets, a pattern which did come to light in the earlier part of 2016 and has since changed course.

The U.S. stock markets, on the other hand, have seemed to revel in Trump’s proposed policies thus far, with the Dow closing above 19,000 for the first time on Tuesday, and the S&P 500 and the Nasdaq extending their gains as well. Analysts widely expect the current bull run to extend a bit longer as Trump’s policies continue to firm.

A Currency Perspective

European Central Bankers on Tuesday reaffirmed their commitment to a super-easy monetary policy, a note that send German two-year paper yields to record lows. The euro remained steady at $1.0626 during Wednesday’s Asian session, while the pound was trading at $1.2417 in advance of an announcement today from British Finance Minister Philip Hammond. The dollar remained firm at 111.05 to the yen, though Japanese markets were closed on Wednesday for a public holiday. The Australian dollar jumped to $0.7425 on Wednesday.