‘Trump trade’ intensifies in global markets

investmentnews.com:

As world financial markets reopened after the attempted assassination of Donald Trump, one thing was clear: The Trump trade is gaining momentum. 

The series of wagers — based on anticipation that the Republican’s return to the White House would usher in tax cuts, higher tariffs and looser regulations — had already been gaining ground since President Joe Biden’s poor performance in last month’s debate imperiled his re-election campaign. 

But the trades took deeper hold, with Trump galvanizing supporters and drawing sympathy by exhibiting defiant resilience after being shot in the ear on stage at a Pennsylvania rally.

Treasuries fell as trading kicked off on Monday, with long-dated bonds leading losses on bets Trump’s fiscal and trade policies will spur growth. The yield on 30-year bonds rose above two-year equivalents for the first time since January, steepening the curve.

The dollar edged higher against most peers, Bitcoin jumped above $60,000 while futures on the S&P 500 Index for September climbed 0.4%.

“For us, the news does reinforce that Trump’s the frontrunner,” said Mark McCormick, global head of foreign-exchange and emerging-market strategy at Toronto Dominion Bank. “We remain US dollar bulls for the second half and early 2025.” 

To be sure, there’s still plenty of room for surprises with almost four months to go in the US election campaign. The emergence of political violence may deepen concern about instability in the US and push investors into haven assets, potentially overshadowing some of the market positioning that has already taken place in the run-up to the election.

Moreover, some investors may want to book early gains or be wary of getting deeper into an already crowded position.

“Political risk is