• Trump is back in the White House; dollar becomes king again
• Selection of cabinet members is the next task
• Gold is the worst performer; melts below $2,700

It's no longer in question, Donald Trump made a remarkable comeback to the White House with 279 electoral seats at the time of writing compared to Kamala Harris’ of 224 despite 34 felony count convictions, two assassination attempts, and a stormy campaign battle with Kamala Harris. 

This is not the only victory for Trump. Republicans also took control of the Senate and look set to maintain their lead in the House of Representatives, which could consequently allow Trump to implement his proposals effortlessly unless he faces opposition from within his own party.

Now, Trump’s focus shifts to assembling his cabinet, likely drawing in loyal allies like Mike Pompeo and Robert Lighthizer, as well as former rivals like Marco Rubio. It would be interesting to see if Kevin McCarthy, who was the Republican number two during Trump’s first term, can win the Chief of Staff position from Sussie Wiles. The list of Treasury Secretaries is bigger, including the billionaire, John Paulson. 

As regards the market reaction, concerns over inflation and a potential delay in future rate cuts lifted the 10-year Treasury yield to 4.4% - the highest since July 2024 – squeezing gold down by 3.0% to $2,652/ounce. 

EURUSD was another victim as the US dollar thrived, sinking below 1.0700 from 1.0900 at the start of the European session. 

On the other hand, Wall Street retained its festive mood, with the S&P 500 unlocking a fresh record high of 5,924. The rally in small cap stocks has been more impressive, with the Russell 2000 gaining more than 4.0% and becoming the second top performer after Bitcoin (+6%).