Global: Trump’s world and the trade landscape in the coming years. Last week’s US elections, which delivered an emphatic victory for Donald Trump and the Republican party, have brought in a sense of déjà vu for Asia. Eight years ago, the region’s commitment to a global rules-based order and open trade was challenged by the surprising victory of Trump who came into office with commitments to a trade war. Since then, through Trump and Biden, tariffs, restrictions on tech access, and scrutiny on investments have been ramped up progressively. Most of these were aimed at China. Though hurt from these actions, China has the wherewithal to counter them to some extent.

The US remains equipped with the world’s most impactful and advanced military, capital markets, science, and technology. Yet, on purchasing power parity basis, China’s economy now makes up a substantially larger share of global GDP. While it is likely the US would intensify the pushback against China’s rise in the coming years ( and they are considerably richer per capita), we do not think the US will manage to make China less consequential to the global economy.

This week’s US CPI release came out in line with consensus expectations (headline: 0.2% m/m, core: 0.3% m/m), but we are not convinced that the report will quell longer-term inflation worries. Notably, core services ex-housing inflation has been running above 0.3% m/m for three consecutive months, suggesting that there is some stickiness in prices. The Fed does get one more set of NFP and CPI prints in early December before the next Federal Open Market Committee meeting (outcome due 19 Dec). Assuming that data does not materially change, we think that the Fed will deliver one final cut for the year, taking the Fed Funds rate to 4.50%.

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