Nomura Securities: Trump's victory will widen the policy divergence between the Federal Reserve and the European Central Bank

In a report, Nomura Securities analysts stated that Republican Donald Trump's victory in the presidential election would widen the existing policy differences between the Federal Reserve and the European Central Bank. As results showed Trump returning to the White House, he claimed victory. They said: "If actual inflation rises, we believe there is a risk of ending easing cycle under Trump's leadership at Fed." Meanwhile, they suggested that due to negative impacts on economic growth, European Central Bank might be forced to take stronger actions. However, Nomura Securities analysts indicated that European Central Bank is very cautious and unlikely to preemptively cut interest rates. Therefore, as long as data meets their expectations, Nomura Securities predicts no 50 basis point rate cut in December.