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Global Equity Market Cap has evaporated nearly 9.5 trillion dollars in three days, yet Trump still makes inflammatory remarks.
On Monday (April 7), the Global financial markets were once again hit hard, as investors' hopes for USA President Donald Trump's change in tariff policy were completely dashed, leading to a continued collapse in market sentiment.
Trump's imposing tariffs has disrupted the game board, and the central banks of Emerging Markets are caught in a dilemma between Exchange Rates and economic growth.
Emerging Markets are highly sensitive to the sharp divergence in interest rates with the USA, which often leads to a swift outflow of local capital, bringing about political instability and adverse effects on the entire economy.
BlackRock Sees 'Bright Spots' in Global Stocks Amid Narrowing U.S. Outperformance Gap
On Trump's "first day," Emerging Markets faced difficulties, setting several records.
The opening price of the MSCI Emerging Markets Index based on expected PE is 46% lower than the S&P 500 Index, marking the largest gap since Obama's first inauguration in 2009; the average yield of local currency bonds in Emerging Markets is also lower than the yield of USA Treasuries. Analysis indicates that due to USA policy actions, a strong dollar, and high USA interest rates, Emerging Markets stocks are underweighted by investors.
US Blue-Chip Bond Issuance Reaches Second-Highest Level Ever
Traders reduce bets on Trump trades as emerging market assets rise.
As traders reduce their bets on Trump's victory, emerging assets surge significantly.