You are here
Asia: Markets, euro build on gains as eyes move to Trump
[HONG KONG] Asian markets extended gains on Tuesday while the euro held up following Emmanuel Macron's first round presidential election win in France, with investors now looking forward to Donald Trump's promised tax reforms.
Global markets soared on Monday after Mr Macron topped the initial polls and looked well on course to beat hit run-off rival, far-right candidate Marine Le Pen, next month.
There had been fears a win for the anti-European, anti-immigrant Le Pen could see France pull out of the euro and even the EU and precipitate its possible collapse.
US and European markets tracked an Asian advance on Monday. And on Tuesday the gains continued with Tokyo up 0.8 per cent by the break, Hong Kong also jumping 0.8 per cent and Seoul 0.4 per cent higher.
Shanghai, which has suffered a series of losses in the past two weeks on concerns about a government crackdown in leveraged investing, edged up 0.2 per cent.
Sydney and Wellington were closed for a public holiday.
And on currency markets the euro, which briefly broke US$1.09 Monday for the first time in almost a month, was hovering around US$1.086, while it also held at 119.50 yen, well up from levels around 117 yen before France's vote.
"With the market pricing in an amiable scenario for risk assets in the second round, investors should continue to feed off this," said Stephen Innes, senior trader at Oanda.
Now attention moves to the United States where Mr Trump is due to unveil his much-vaunted tax overhaul on Wednesday, which will call for cuts to personal and corporate rates, Bloomberg news reported a White House official as saying.
Mr Trump's pledge to slash taxes and boost infrastructure spending were key drivers of a global market rally after his November election, though the past few weeks have seen a retreat as he failed to pass key healthcare legislation, throwing the agenda into doubt.
However, there was a sense of trepidation as North Korea celebrates the 85th anniversary of its army, with fears Kim Jong Un could press on with his recent sabre-rattling with the US by conducting another nuclear or missile test.
Growing tensions between Pyongyang and Washington have fanned worries about a possible conflict in East Asia.
Another source of concern among traders is the threat of another costly US government shutdown as Mr Trump heads for a face-off with Democrats over funding his controversial Mexican border wall.
Building the wall was a key election promise and he is determined to get Congress to approve a downpayment as part of a bigger bill to keep the US government funded.
The two sides have until Saturday to pass the bill or face the first shutdown since a 16-day closure in 2013 that cost the government billions of dollars.