HSBC: Here's what to expect from President Trump

HSBC expects a Trump Presidency to lead to "lower taxes, higher deficits, restrictions on trade and the international flow of capital, and potentially a sizable reduction in the labor force."

The bank's chief US economist Kevin Logan makes the predictions in a note sent to clients early Wednesday morning, with Donald Trump edging closer to win the White House.

Logan says the key question for financial markets is "how quickly he will follow through on a number of his campaign promises."

These are, broadly:

• a renegotiation of treaties such as NAFTA and trade deals with China and Mexico, with the aim of driving down trade deficits;
• possible restrictions on international capital flows;
• cutting income tax;
• repealing the Affordable Care Act (Obamacare);
• restricting immigration based on religion and national origin;
• deporting illegal immigrants, which could be as many as 11 million people.

Logan believes that the deportation drive "would be costly and would also lead to a sizable reduction in the country's labor force. That is turn could lead to a reduction in both actual and potential GDP growth."

Cutting income tax and a planned cut of repatriation of overseas cash by companies from 35% to 10% would likely increase the deficit as there would be less tax receipts collected.

He adds: "A Trump Presidency will probably have mixed implications for businesses in the US. Trump advocates lower corporate taxes, but he has also suggested that he would try to curtail the ability of companies to freely move capital out of the country."

Stock markets are diving around the world as Trump closes in on the White House and global currencies are rising against the dollar, suggesting an anti-Trump sentiment in financial markets.