Donald Trump was elected the 45th President of the United States, in the early hours of Wednesday morning. The President-elect, who will be inaugurated on January 20, 2017, confounded pre-election polls and took a series of key battleground states, including Florida, Ohio, North Carolina and Pennsylvania, a state that has not backed a Republican candidate for president since 1988.

Republicans will also hold sway in Congress after fending off a Democratic challenge in the Senate, keeping its hold over both the House of Representatives and the Senate.

Equity Markets

Asia

For Asian markets trading Wednesday morning, we felt it was almost a replay of the Brexit tape—initial complacency made a hard turn into the realization that an upset was imminent. Morning flows were skewed to the sell-side. Equity activity was limited, suggesting that retail investors and speculative traders were leading the move. The selling spillover continued as a trickle-down effect, first into the Japan and then into Hong Kong. After initial heavy mark-downs, some buying did emerge with some short-covering.

By the time Asian equity markets closed, Japanese equities were the laggards, negatively impacted by a stronger Japanese yen. Elsewhere, the declines were less extreme as equity markets in South Korea, Hong Kong and Australia finishing the day in negative territory.

Europe

European equity markets had an impressive turnaround in early trading on Wednesday. The initial reaction across European markets was sharply lower, but markets subsequently rallied. Trump’s victory speech struck a conciliatory tone which may have eased some nerves, and in our view, it feels as if many investors are taking a wait-and-see approach. Early volumes were around twice the average; markets do feel much more orderly in comparison to morning trading on the day of the Brexit referendum results.

Russia, at the time of writing, was the best performing market in Europe, due to Trump’s softer stance toward the country. Additionally, Switzerland benefited from strong performance of its the health care sector and its perceived safe haven qualities, while the United Kingdom was holding up better than most other European markets due to its exposure to the basic resources and health care sectors.

Equity markets in Spain and Portugal have underperformed due to their exposure to Latin America, particularly Mexico, given Trump’s rhetoric on the country. The Mexican peso hit an all-time low overnight while the votes were being tallied.