There has not been an enormous reaction in the markets to the attempted assassination of Donald Trump on July 13. There was some move in terms of the Trump 2.0 trade – Treasury yields were higher, the dollar gapped up, Asian stocks fell, and the Mexican peso declined sharply. But the dollar has come off since and that could be the result of a range of factors at play.
As widely noted by multiple commentators, the assassination attempt only burnishes Trump’s image as a fighter and a man you cannot hold down. They tried to lock him up, they tried to kill him; his response was simply: “fight”. Trump was already riding high after the debate with Biden; the events of the weekend only make it more of a certainty that he wins in November.
It also makes it almost impossible to imagine Biden stepping down now. The 2024 Republican National Convention (RNC) starts today. We looked at what a Trump 2.0 could mean for markets in the latest episode of the Overleveraged podcast.
Bitcoin surged after Donald Trump was nearly assassinated. It not just that he’s seen as “pro-crypto” — it’s likely a fear trade.
I think there is a genuine fear about what could happen in the United States. Trump is talking about bringing the country together. We could see a change. The former president intends to give a "whole different speech" on Thursday, instead of the planned "humdinger”. Can Trump the survivor become Trump the saviour?
Elsewhere, Asian shares fell on soft Chinese growth figures. China Q2 GDP rose 4.7% YoY from 5.3% prior and 5.1% expected. Japan's Nikkei 225 index closed down 2.45%, while Hong Kong's Hang Seng Index slipped by 1.5%. European stock markets followed suit and opened broadly in the red on Monday morning with Burberry and Swatch weighing on the luxury sector.
Later today we look to the Empire State manufacturing index from the US. Jay Powell, the Federal Reserve chairman, is due to speak at the Economic Club in Washington D.C. He was cautious in his Congress testimony last week, citing the risk of moving on interest rates too early — and too late.
Earnings highlights also come from BlackRock and Goldman Sachs.
Sterling is knocking on the 1.30 mark against the dollar — let’s see if this marks the top of the range or not.
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