Expect rate cuts around the world following this week’s US presidential elections

Analysts anticipate a flurry of rate cuts following this week’s US elections: The US Federal Reserve and its peers around the world are expected to cut interest rates following Tuesday’s US presidential elections, Bloomberg reports. Analysts expect central banks responsible for over a third of the global economy to make their decisions partly based on the results of the election — all with their own guesses over how each result could shape American economic policy over the next four years.

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Remember: The expected cuts come just two months after the Fed’s 50 bps rate cut in September — its first in over four years.

While some were skeptical of an incoming loosening cycle, employment data begged to differ: Weak US employment data for October released on Friday showed hiring increase at its slowest pace since 2020, pushing up analysts’ expectations of multiple rate cuts this year even further, according to Bloomberg. This comes after top Wall Street executives — including the chief executives of Goldman Sachs, Morgan Stanley, and Standard Chartered, among others — suggested last week that the US Federal Reserve is unlikely to enact more than one more interest rate cut by year-end.

The question is, by how much? Economists see the Fed opting for a 25 bps cut on Thursday, with another such cut penciled in for December, Bloomberg writes, with the UK, Sweden, the Czech Republic, and a number of other countries anticipated to cut rates following election day. However, central banks could hold off on their decisions until there’s a settled result, which — if 2020’s drawn-out process is any indication — could extend several days beyond election day.

Economists see the result as having big implications for global trade policy: “With polls showing the campaign in a dead heat, the stakes couldn’t be higher. The winner will be able to reshape trade policy — Trump, especially, is likely to make use of this power if he wins,” economists from research service Bloomberg Economics said.

MARKETS THIS MORNING-

Most Asian markets are in the green this morning — South Korea’s Kospi is leading the gains, up over 1.5% in early trading. The Shanghai is up 0.4% and the Hang Seng is up 0.2%.

THE CLOSING BELL: TADAWUL-

The TASI rose 0.2% yesterday on turnover of SAR 4.2 bn. The index is up 0.7% YTD.

In the green: Riyadh Cables (+10.0%), MBC Group (+10.0%) and Anaam Holding (+8.0%).

In the red: Jabal Omar (-4.2%), Rasan (-4.0%) and Fourth Milling (-3.9%).

THE CLOSING BELL: NOMU-

The NomuC rose 0.3% yesterday on turnover of SAR 66.5 mn. The index is up 11.3% YTD.

In the green: Meyar (+7.6%), WSM (+6.5%) and NGDC(+6.0%).

In the red: Paper Home (-8.2%), Al Wasail Industrial (-6.9%) and Al Dawliah (-5.9%)