Americas

Equity capital markets are bracing for the US presidential election on Tuesday. Participants believe Hillary Clinton is narrowly more likely to win, but that stockmarkets around the world would fall if Donald Trump won.

Argentina’s return to international bond markets this year broke many records, and its after-market performance has been equally stunning. It has also changed investors’ concerns. Previously preoccupied with court rulings, an unpredictable government, legal technicalities and a curve comprising an assortment of complex instruments, bondholders now are looking at more conventional credit issues and can enjoy a normalised dollar curve with several liquid points. The buyside is now assessing inflation and inflation expectations, GDP growth and FDI, and — crucially — progress on the fiscal deficit.

Luis Caputo had been head of LatAm trading at Deutsche Bank and JP Morgan, but he’d never done a deal as important as the one facing him at the start of 2016. Few — if any — bankers ever do. Argentina’s finance secretary, known in the market as “Toto”, led the nation’s negotiations with holdout creditors, achieving a faster and cheaper resolution than most expected. This has left Caputo confident that the government will be able to do just as good a job in tackling the outstanding issues facing the economy.

Mauricio Macri’s government is having to find a fine balance between fiscal consolidation and suffering too much short term economic and political damage. Markets appear willing to finance gradual change, and economists back the government’s strategy, but improvements need to come quickly.

FIG borrowers’ last clear window for issuance hangs in the balance ahead of Tuesday’s US elections, as bankers fear a victory for Donald Trump would limit November supply and raise new issue premiums considerably.

The US Department of Financial Services has fined the New York branch of Agricultural Bank of China $215m for violating local anti-money laundering (AML) laws. The regulator also said that the bank obscured dollar clearing transactions of Chinese and Russian companies, apparently by issuing counterfeit and falsified invoices.

Renaissance Capital has hired a new head of international equity capital markets, and its US subsidiary RenCap Securities has added two senior bankers to its fixed income, currencies and commodities team.

Who will win the US presidential election on November 8 was far from clear this week. But it looks increasingly likely that a Donald Trump win could bring 2016's primary capital markets activity to an abrupt halt.

The US stock market and the dollar have been falling since last week, as fears have grown that Donald Trump might win the US presidency in Tuesday's election.

Emerging markets borrowers may be well funded but they are still not prepared for a Donald Trump victory in the US presidential election next week. While borrowers have completed the majority of their funding for the year, the market is positioned for a Clinton victory, and should she lose, a big sell-off is expected to ensue, particularly in Latin America, as investors look for safe haven assets.

Long-languished plans to centrally clear foreign exchange derivatives have been jump-started back to life, claimed dealers who are optimistic that a cleared FX options contract could be available to trade within the coming months and pave the way for further progress in the asset class.

High grade dollar issuance got off to a slow start in November as event risk dominated the minds of borrowers and investors ahead of the US elections.