A look at the day ahead in European and global markets from

Wayne Cole.

It's been a wild ride in markets with the dollar and Wall

Street futures surging while Treasuries took a beating as early

results in the presidential election favoured Republican Donald

Trump.

Several key battleground states were still to be called, but

betting sites heavily favoured Trump and the NY Times real-time

forecast projected a 91% chance of him winning.

Analysts generally assume Trump's plans for restricted

immigration, tax cuts and sweeping tariffs if enacted would put

more upward pressure on inflation and bond yields than would

Harris' centre-left policies.

Trump's proposals would also tend to push up the dollar and

potentially limit how far U.S. interest rates might ultimately

be lowered.

Thus while markets were still confident the Federal

Reserve would cut interest rates by 25 basis points on Thursday,

futures for next year eased into the red with December down 8

ticks.

The risk of a higher terminal Fed funds rate combined with

the prospect of ever-larger budget deficits to hammer

Treasuries, sending 10-year yields to four-month

highs and two-year yields to a three-month top. Ten-year yields

were last up 17 basis points at 4.449%, the sharpest rise since

April.

The jump in yields fuelled bullish bets on the dollar, which

boasted its biggest daily gain since early last year. The

euro, yen and Swiss franc all sank more than 1%, while the

trade-exposed Australian and New Zealand dollars dived to

three-month lows.

China's yuan also took a tumble on fears Trump would follow

through on plans to impose punishing tariffs on Chinese goods.

Wall Street looked forward to promised tax cuts and less

corporate regulation, with S&P 500 futures up 1.2% and

Nasdaq gaining 1.3%.

European stock futures were less enthused as

Trump's tariff policies, if enacted, could ignite a global trade

war and threaten EU exports.

There was also the risk Trump could pull out of NATO,

forcing Europe to spend more on defence, while emboldening

Russia in its territorial ambitions.

Key developments that could influence markets on Wednesday:

- EZ services PMIs for Oct, producer prices for Sept

- German industrial orders for Sept

- US services PMI for Oct