Capital markets pare initial losses after Trump´s acceptance speech

Global capital markets largely pared their initial 'risk-aversion' move following the election victory by US Republican candidate Donald Trump.

Analysts pointed to the importance of the conciliatory tone adopted by Trump in his initial acceptance speech as the key factor helping to calm traders´ jangled nerves.

Significantly as well, the US Republican Party also took both houses of Congress, culminating in a so-called 'full-sweep' on Capitol Hill.

Analysts at Morgan Stanley had assigned a probability of just 4% to such a scenario in the run-up to the elections, which they believed would likely result in significant fiscal stimulus and trade protectionism.

As of 0927 GMT Dow Jones futures had cut their initial losses to just 250 points and on average the main European equity indices were off by approximately one percentage point.

Ten year US Treasury note yields were flat at 1.86%, although the US dollar/yen was down by 1.58%, betraying some caution on the part of traders but nonetheless far above the lows of 101.19 plumbed during the Asian session.

Similarly, the yield on the benchmark two-year US Treasury note was unchanged at 0.85%, having hit an overnight low of 0.71%.

Against the Mexican peso the US dollar was holding onto its gains, having strengthened by 8.85% to 19.94.