Agency: If Trump wins the election, it is likely to cause an initial adverse reaction to emerging markets

Capital Economics said that if Trump wins, it is likely to trigger an initial adverse reaction in emerging markets, similar to what happened when he won the election in 2016. Economist Giulia Bellicoso said that Trump's victory in 2016 pushed up U.S. Treasury yields and the dollar, leading to tighter financial conditions in emerging markets and hurting some assets. She also said that compared with 2016, the market's expectations for Trump's victory now seem higher, but today's tariff proposals are more extreme and the U.S. fiscal situation is worse. The long-term impact on emerging markets will depend on the extent to which these proposals become policy. Capital Economics believes that most of Trump's fiscal plan will be watered down and doubts whether all tariff proposals will be implemented. (Jinshi)