Liam Dann: Markets point to Donald Trump win - and heavy political reality for NZ leadership

The odds heavily favour US President Donald Trump from here. Photo / AP

Uncertainty is never good for markets and the prospect of confusion while mail-in votes are counted in this tight US electoral race may rattle some investors.

But with US futures markets pointing to a Wall street rally tonight, we can at least be certain that the blue wave - a Democrat landslide - did not happen.

The odds may favour Trump from here.

In purely a financial assessment Wall Street always favoured Donald Trump and his low tax approach to economics.

A Joe Biden win had been priced in over the past weeks with markets easing back from record highs.

That outlook has been reversed on the basis of today's results.

To some extent this looks very much like a repeat of 2016 - when all the polls had Hillary Clinton odds on to win.

We may need to brace for some serious volatility in the US as the final machinations of the electoral process play through.

If Biden does claw things back to win from here we may yet see social as well as market unrest.

Nothing about the next few days looks simple or easy for the USA.

But whatever happens from here, we've been offered a clear look at the political reality in the United States.

There can be no uncertainty about the style of politics and leadership Trump represents.

On that much he is entirely transparent and it is on that basis he retains the support of around half of all Americans - whatever way the electoral college finally falls.

This might not be the America we know and love from Hollywood movies or the billboard Top 40, but this is America in 2020.

This is the country New Zealand's new Government has to deal with.

The US is still the New Zealand's third largest export destination.

It is still - despite our reliance on China's economy - the political and cultural power with which we are most closely aligned.

If Trump retains control of the White House then New Zealand needs to brace for another four years of heavy-handed trade policy.

There will be more stand-offs with China.

There will be no chance of a resolution of issues which have rendered the World Trade Organisation all but impotent.

There was, to be fair, little chance that Biden would solve all those issues.

Trade experts noted that he too talked tough on China and advocated a buy America policy which would not have passed WTO rules in the pre-Trump era.

The ground has shifted in the US, regardless of who holds the White House.

The days of multi-lateral, outward-focused US economy appear to be over.

New Zealand will need to stay focused on finding its own path to trade expansion and trade deals.