Emerging markets, notably Mexico and Indonesia, were among the winners of Monday’s debate as many investors believed a Clinton win would mean more favorable foreign trade relations.
Trump has exhibited strong protectionist rhetoric on international trading, vowing to renegotiate some trade agreements in his “America First” platform. Consequently, many emerging countries, notably those involved in the Trans-Pacific Partnership, could suffer under a Trump administration focused on protecting American industries.
Related: The Best LatAm ETFs
“The greatest danger: raising the Base Rate to the point that material damage is done to the domestic economy. 4.75% is a relatively high rate … [that] in place for long enough [could] slow local economic activity. Against this there is the potential for a virtuous cycle of strengthening currency forcing shorts to cover and allowing the central bank to cut rates,” according to the Markfield note posted by Barron’s.
For more information on the Mexico ETF market, visit our Mexico category.