Global markets are currently gaining from U.S. President Donald Trump's pledges to slash financial regulation and cut taxes, but this optimism is unlikely to last, a senior client adviser at Nomura told CNBC Wednesday.
"In the very short-term, there could be a sell-off. I think there's be a big repricing event to happen, I just think we have got one more leg-up in risk, i.e. in equities, and one more leg higher in bond yields before we get to that point," Nomura's Bob Janjuah, known for his bearish views on the market, told CNBC on Wednesday.
"We've gone from thinking that Trump was our devil to thinking he was our savior; post-election. We are now in a world where we think Trump cannot tie his own shoe laces, because he can't get anything done in Washington," he added.
While the administration's attempt to overhaul and repeal Obamacare failed to materialize, Trump has yet to unveil another campaign pledge, his much anticipated tax reform. The president had promised to cut corporate taxes from 35 percent to 15 percent.
"Some kind of tax reform bill will have to be delivered in the next few months, the market will like that. I think what the market will come and say is, 'Is that it?'," Janjuah told CNBC.
Janjuah believes that in the near future Trump will not go as far as he has pledged and will therefore fail to meet market expectations. The political promises of Trump have aided a rally in U.S. markets since his election win. Earlier this year, the Dow Jones industrial average hit the 20,000 point and the 21,000 point threshold for the first time.
'Belly of this year will be OK'
However, Janjuah added that 2017 could bring positive economic news, but said the traditional drags on global growth remain.
"Market-wise the belly of this year could be OK. We could get a decent positive re-pricing of equities in Europe post French elections. I think the market will assume their version of Trump reflation will be a (Emmanuel) Macron plus (Martin) Schulz type of reflation," Janjuah said, in relation to the upcoming French and German elections, which have affected investor sentiment.
"Much beyond that we come back to the same old poise, globally we have more debt on our balance sheets than ever before, demographics are rapidly deteriorating, attitudes towards immigration are hardening. So the thing that kept our generation young is falling away, globalization, technology aren't going away; these are massive things. (Political uncertainty) is just noise in that big story," Janjuah added.
Not every analyst or strategist is preparing for a sell-off in global markets with some banks reiterating their bullishness in recent weeks. Analysts at Citi said Wednesdays that they expect global equities to rise 5 percent by the end of the year as the economy improves.