A Trump win might very well drive opportunities in Asia. Japan, ASEAN and financials are well-positioned to profit from the US Election outcomes, Joshua Crabb, Head of Asia-Pacific Equities, Robeco, writes.
A clean sweep for the Republicans will result in a more aggressive policy agenda by Donald Trump. US futures are reacting favorably so far, with the DXY stronger and rates higher across the board.
Asian markets are mixed, with notable movements including a weaker Hang Seng and H-share market, although A-share markets are up and the Japanese market is stronger.
So, What Does This Mean For Asia?
The primary concern will be around tariffs and trade restrictions, which will have some impact but have been somewhat factored in. The offset to this will likely be a more aggressive policy response in Asia, both fiscally and monetarily.
The first indication of this will be stimulus in China, with the NPC scheduled to finalize on 8 November. A potentially higher inflationary and rate outlook should be positive for growth and equities at the margin.
Closely Watching Stimulus Efforts
As long as this results in fewer (but not an end to) rate cuts and better growth, this will drive opportunities in Asia. However, sector and policy responses will be important.
Our overweight positioning in Japan, ASEAN, and financials should benefit from this outcome. We will be closely watching stimulus efforts in Asia. The caveat will be on exporters, a potentially stronger dollar shorter term, and heightened geopolitical risks with a more domestically focused US. Domestic-oriented countries and sectors should do better.
