With Rising US Stocks and Yields, Trump Trades Gain Momentum – Asia Market Wrap

A wave of global trades linked to Donald Trump’s soaring presidential hopes made substantial swings, with market futures continuing gains. Treasury yields are rising, and the Dollar is up the most since February 2023.

S&P 500 futures rose 1.2%, 10-year rates jumped 12 bps to a four-month high of 4.39%, and Bitcoin hit a new high – actions that indicated increased bets on a Trump administration.

The Mexican peso fell 2.3%, while the Japanese Yen and Euro dropped at least 1.2%. Contracts on the Russell 2000 Index rose 2.5%. Given the Republican party’s protectionist posture, smaller enterprises with primarily domestic operations are viewed as possible winners.

Japanese and Australian stocks rose, but Hong Kong equities fell. European stock futures are slightly lower.

A group of Wall Street investors have bet that Trump’s pro-growth attitude on industrial policy, corporate tax cuts, and tariffs will boost equities and stoke inflation, pushing bond yields and the US Dollar higher. Crypto is viewed as benefiting from looser regulations and Trump’s stated support for the cryptocurrency.