Market roundup: Safe havens await a Donald Trump win

A victory for Hillary Clinton would be less disruptive than Trump’s in the US elections, but there are multiple safe havens for investors in case the latter wins


Gold and the yen have already made handsome gains in the run-up to the US elections. Photo: Bloomberg
Gold and the yen have already made handsome gains in the run-up to the US elections. Photo: Bloomberg

As the largest economy of the world, the US, gears up for a change in its presidency, markets are getting cold feet on fears of Republican nominee Donald Trump winning.

It is known that a win for Democrat Hillary Clinton would be less disruptive than a Trump win, but there are multiple safe havens for investors to take refuge if Trump does become president.

According to HDFC Bank Ltd, gold, Japanese yen, Swiss franc and the euro would be preferred by investors in the event of a Trump presidency.

Emerging market currencies would be beaten.

Both gold and the yen have already made handsome gains in the run-up to the US elections.

Crude oil prices on slippery road

Brent crude price has dropped to $45.58 a barrel, lower than $45.97 a barrel seen before the Organization of the Petroleum Exporting Countries (Opec) decided to cut oil production on 28 September in Algeria.

Old disputes between Saudi Arabia and rival Iran resurfaced at a meeting of Opec experts last week, with Riyadh saying it could raise oil output steeply to bring prices down if Tehran refuses to limit its supply, highlights a Reuters news report on Friday citing Opec insiders.

A new rise in tensions observed during the meeting of experts highlights the fragile nature of Opec agreements, said the Reuters report.

Even as developments at Opec are critical, the forthcoming US election could have an impact on the dollar, which may in turn affect crude oil prices.

Peak oil demand could get closer

Oil demand could peak in as little as five years.

“We’ve long been of the opinion that oil demand will peak before supply,” said Simon Henry, chief financial officer of Royal Dutch Shell Plc in a recent conference call.

“And that peak may be somewhere between 5 and 15 years hence, and it will be driven by efficiency and substitution, more than offsetting the new demand for transport.”

Technological innovations such as electric vehicles and faster developments in the renewable energy space are factors that could drive oil demand to peak sooner than expected.

Outlook for oil companies thus is on shaky ground.

“For the first time, oil companies have to think seriously about the future,” Alastair Syme, an oil analyst at Citigroup Inc. in London, told Bloomberg.

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