- The assassination attempt on former President Donald Trump is likely to be on investors’ minds this week.
- Bitcoin surged in the wake of the incident as it traded as a safe haven, and the dollar rose on Monday as the “Trump trade” resumed.
- A Trump presidency could boost inflation and push bond yields higher.
of Failed assassination attempt About the former president Donald Trump The dollar is expected to dominate markets this week as investors focus on the so-called “Trump trade.”
The Trump trade is pricing in President Trump’s policies that will encourage “higher inflation expectations, higher breakeven rates, higher yields and a steeper yield curve” due to the prospect of a larger U.S. budget deficit, Kyle Rodda, senior market analyst at online trading platform Capital.com, said in a client note.
Even before the weekend’s events, economists and analysts were already debating what a Trump presidency would mean for the markets.
Investors are starting to reassess the chances of President Trump winning the vote later this year, as his reelection could bring about policy shifts that could have an impact on markets.
Bitcoin surged by more than $60,000 after Saturday’s shooting, to about $63,000 as of 2:30 a.m. ET on Monday. The price of gold, a traditional safe-haven asset, was little changed at about $2,400 an ounce.
In the short term, Roda wrote, investors will likely turn to Bitcoin and gold as a safe haven from political instability in the United States.
S&P 500 futures and Nasdaq futures rose 0.3% and 0.4%, respectively, as investors bet that deregulation would come if Trump wins the presidential election.
U.S. Treasury futures fell, but the dollar rose slightly on expectations of tougher trade policy.
Despite political uncertainty in the United States, stock markets were quiet early on Monday.
Hong Kong’s Hang Seng Index fell 1.4% after China’s second-quarter growth data was disappointing. Japanese markets were closed for a public holiday.
European stock futures fell.
Still, investors will likely factor Trump into their investment decisions for the rest of the year.
“The attempted assassination of former US President Donald Trump over the weekend will have an impact on everything in the markets,” Roda wrote.
“Historical parallels suggest that this event will galvanize the Trump vote and that markets will gradually price in the so-called ‘Trump trade,'” Roda wrote.
“If the probability of a Trump presidency increases, inflationary policies such as tighter immigration restrictions, stronger trade ties and increased spending may be enacted, and the direct impact could be a stronger US dollar,” Yep Rong Jun, a market analyst at trading platform IG, wrote on Monday.
