Customers watch a speech by U.S. President Donald Trump on a television during an election-watching event at a bar in Beijing, China.
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European investors took uncertainty over the U.S. election results in their stride on Wednesday, as world leaders refrained from commenting on the tight race and the two candidates’ conflicting claims.
- European markets fell slightly at the opening but recovered promptly, even though the prospects of a “blue wave” with a prompt and significant fiscal stimulus that had boosted shares in the last days was waning. The European undefined index was back up 1.4% in midday trading.
- U.K. foreign secretary Dominic Raab said on Wednesday morning that even though the election was still “too close to call,” he thought the U.K.-U.S. relationship would go “from strength to strength whichever candidate wins the election.”
- In the weeks before the election, Viktor Orbán, the far-right Hungarian prime minister, was the only European Union leader to voice public support for one of the U.S. presidential candidates, saying that he was “rooting” for his “friend” President Donald Trump. All other leaders had stuck to the traditional diplomatic self-restraint.
- Some U.K. officials also privately opined that if Trump was re-elected he might prove more favorable to Brexit and more inclined to strike a rapid bilateral trade deal with the U.K.
The outlook: European leaders, who had been broadly and silently rooting for Biden, will have to wait to have more clarity on the direction the U.S. economy might take under whoever is elected president, and the nature of the trans-Atlantic trade and strategic relationship after four years of turmoil.
As for markets, their sanguine mood, despite the disappearing prospect of a big stimulus, may come from another fast-shrinking prospect: a swift move to raise taxes on businesses now seems unlikely, whether Trump wins re-election or a humbled Biden gets to the White House.
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