Market Comment – Dollar recovers further on Trump boost
US dollar extends rebound as US yield curve steepens on Trump bets
Dow Jones hits fresh record but global stocks slip on trade war fears
Dovish Powell lifts sentiment, retail sales eyed next
![](https://www.xm.com/wp-content/uploads/2024/07/Perf-July16.png)
Dollar catches a bid on Trump trade
A steepening US yield curve helped the US dollar to bounce back from last week’s post-CPI lows as growing bets that Donald Trump would get re-elected as President pushed long-dated yields higher while short-term yields fell on firming expectations that the Fed will cut rates in September.
The dollar index is heading higher for a second day on Tuesday as investors position themselves for a second Trump presidency following the boost to his popularity after Saturday’s failed assassination attempt.
Trump is seen as increasing deregulation, cutting taxes and slapping fresh tariffs on Chinese imports, which, regarding the latter two, would be inflationary.
Trump is seen as increasing deregulation, cutting taxes and slapping fresh tariffs on Chinese imports, which would be inflationary.
But this is a more long-term view on inflation and why the 30-year Treasury yield jumped the most since the shooting. In the near term, however, rates look set to fall as Fed Chair Powell gave further hints on Monday that a rate cut could be close.
Speaking at the Economic Club of Washington DC, Powell said that the recent inflation data does “add somewhat to confidence” that inflation is on course to reach the 2% inflation target sustainably.
US equities rally on upbeat earnings and Trump bets
Rising expectations that the Fed will not only slash rates at least twice this year, but also that rate cuts in 2025 will be a lot more aggressive, fed the positive sentiment on Wall Street. The Dow Jones Industrial Average closed at a new all-time high yesterday, as energy and banking stocks rallied.
Rising expectations that rate cuts in 2025 will be a lot more aggressive fed the positive sentiment on Wall Street
Strong earnings results by Goldman Sachs lifted the banking sector, while energy stocks climbed on hopes that a Trump win would be positive for the fossil fuel industry. Apple was another winner after it received a new analyst buy rating, with the stock closing at a new all-time high.
Bitcoin also surged at the prospect of a Trump victory in the November election amid Trump’s apparent change of heart about the crypto industry.
Global markets anxious about Trump presidency
Elsewhere, the mood was more muted with European indices in the red for a second day, while shares in Asia were mixed. The fear is that another term of Trump as president would lead to an escalation of trade tensions between the US and China, and potentially between Brussels and Washington as well.
The fear is that another term of Trump as president would lead to an escalation of trade tensions
The former president was formally nominated as the Republican party nominee on Monday, but of more interest to the markets was his choice of his running mate, who could become the next vice president. Trump picked Ohio Senator JD Vance as his VP, adding to concerns that a Trump administration would take an even more hardline stance the second time around on key issues such as Ukraine, China and NATO.
Yen on the slide again, US and Canadian data eyed
In the FX market, the yen found itself on the backfoot again, weakening to around the 158.50 per dollar level, despite fresh warnings by the Japan’s Chief Cabinet Secretary Yoshimasa Hayashi about “excessive volatility”.
The focus later in the day will be on Canada’s CPI report, which will likely be crucial for the Bank of Canada’s policy decision next week. Traders will also be watching retail sales numbers out of the United States due at 12:30 GMT, as well as comments by Fed Governor Kugler at 18:45 GMT.
![](https://www.xm.com/wp-content/uploads/2024/07/Calendar-July16.png)
Asset collegati
Ultime news
Disclaimer: le entità di XM Group forniscono servizi di sola esecuzione e accesso al nostro servizio di trading online, che permette all'individuo di visualizzare e/o utilizzare i contenuti disponibili sul sito o attraverso di esso; non ha il proposito di modificare o espandere le proprie funzioni, né le modifica o espande. L'accesso e l'utilizzo sono sempre soggetti a: (i) Termini e condizioni; (ii) Avvertenza sui rischi e (iii) Disclaimer completo. Tali contenuti sono perciò forniti a scopo puramente informativo. Nello specifico, ti preghiamo di considerare che i contenuti del nostro servizio di trading online non rappresentano un sollecito né un'offerta ad operare sui mercati finanziari. Il trading su qualsiasi mercato finanziario comporta un notevole livello di rischio per il tuo capitale.
Tutto il materiale pubblicato sul nostro servizio di trading online è unicamente a scopo educativo e informativo, e non contiene (e non dovrebbe essere considerato come contenente) consigli e raccomandazioni di carattere finanziario, di trading o fiscale, né informazioni riguardanti i nostri prezzi di trading, offerte o solleciti riguardanti transazioni che possano coinvolgere strumenti finanziari, oppure promozioni finanziarie da te non richieste.
Tutti i contenuti di terze parti, oltre ai contenuti offerti da XM, siano essi opinioni, news, ricerca, analisi, prezzi, altre informazioni o link a siti di terzi presenti su questo sito, sono forniti "così com'è", e vanno considerati come commenti generali sui mercati; per questo motivo, non possono essere visti come consigli di investimento. Dato che tutti i contenuti sono intesi come ricerche di investimento, devi considerare e accettare che non sono stati preparati né creati seguendo i requisiti normativi pensati per promuovere l'indipendenza delle ricerche di investimento; per questo motivo, questi contenuti devono essere considerati come comunicazioni di marketing in base alle leggi e normative vigenti. Assicurati di avere letto e compreso pienamente la nostra Notifica sulla ricerca di investimento non indipendente e la nostra Informativa sul rischio riguardante le informazioni sopra citate; tali documenti sono consultabili qui.