2024-07-15 21:41:40
The dollar did not benefit from the increase in bond prices on Monday, following the prospect of Donald Trump winning the election in November, after the assassination attempt against him on Saturday.
The dollar did not benefit from the increase in bond prices on Monday, following the prospect of Donald Trump winning the election in November, after the assassination attempt against him on Saturday. Around 8:55 pm GMT, the greenback gained only 0.11% against the dollar, at 1.0895 dollars per euro. According to Yardeni Research, the rise in bond rates, especially on medium and long-term developments, is the result of increased expectations of seeing Donald Trump win a second term.
The yield on 10-year US government bonds stood at 4.23% compared to 4.18% at Friday’s close. Also, 30-year rates rose above their 2-year range for the first time since January. This is a sign that if operators are on the same short-term monetary policy scenario, i.e. two rate cuts at the end of the year, their forecasts are long-term. The tax cuts initiated by Donald Trump in 2017 must, as they stand, end in 2025. Extension, in the event of electoral success in November, will increase the deficit by 4,000 to 5,000 billion dollars, according to the Congressional Budget Office (CBO) ).
“Markets don’t react much to this kind of event”
The United States government will have to borrow more, “The flow of supply (of Treasury bills) exceeds demand at current rates”, anticipates Yardeni Research, which explains why fruits are falling on Monday. Targeted on Saturday by shots, one of which injured his ear, Donald Trump saw his price increase by each one. The online betting site Smarkets now assigns a probability of 69% to the election of the original New Yorker, compared to only 16% to Joe Biden.
After showing some signs of darkness, the flight to the assets considered safe, such as the dollar, in suspicion of Saturday’s event, “antelope”one of the nicknames of American money, however has fallen into line. “Historically, markets don’t react much to this type of event”, underlined Christopher Vecchio, from Tastylive. On the day of the assassination of American President John F. Kennedy, the Dow Jones lost less than 3% and made its losses again the next time.
Donald Trump “He was very lucky and the market saw a few sympathetic votes, which increased the possibility of a Republican wave”which will allow the party to win both the presidency and both houses of parliament, according to Christopher Vecchio.
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