The Highlights:
- Donald Trump clinched a second term as US president in a decisive victory, with a Republican majority poised to implement lower taxes and higher trade tariffs expected to drive inflation.
- Shares and fixed interest markets retreated as investors shifted to ‘Trump Trades’ in October, anticipating a GOP election victory with pro-growth, inflationary policies driving bond yields and the US dollar higher.
- International shares experienced a mixed month, as the weakening Australian dollar was a tailwind for unhedged currency exposure but was a drag for hedged exposure. Meanwhile, Australian shares struggled, due to stubborn inflation dampening hopes of near-term rate cuts.
- Global and local bonds yields climbed, weighing on returns for fixed interest markets, as spreads continued to tighten across government and corporate bonds (credit).
Read the update here: October Monthly Market Update