What the Leads
Trump’s name just got a new chair: he’s expected to win the 2024 presidential race and become the second president in history to serve two separate terms (yeah, that’s new, the only other guy was Grover Cleveland). The election’s déjà vu is that the markets are already sweating with the “Trump‑win” vibe.
Key States, Big Wins
- Georgia & North Carolina have been called for Trump, giving him a hefty lead.
- He’s safely ahead in Rust Belt favorites, while Harris’s chances feel like trying to win a lottery in a blackout.
- Voters are still counting, but the “in‑lines” feel more won than postponed.
Financial Markets Take the Cue
Once North Carolina’s results lined up, the markets took a breath and turned bullish: stocks surged, and yields fell. The big takeaway? The U.S. Treasury curve is flipping people’s expectations about fiscal spending.
FX – Dollar Storming the Stage
The greenback leap‑frogged every other currency, clocking a 1.5% bump in the DXY, the best climb since March 2020. Against the entire G10 family, the dollar was the star, while trade‑sensitive coins hit a rough patch.
- MXN plunged ~3%, flirting with a 21 rate—call it “snakes on a chartered flight.”
- CNH slid near 1% amid rumors of banks cashing out U.S. currency to bolster the yuan.
Why this rally? A fresh ticket of promised tax cuts and potential infra‑spending will lift U.S. growth expectations, whereas trade jitters keep dudes cautious about inflation. The Fed’s quick‑norm strategy still seems fine to most investors.
Bond Market – A Flip‑Flop Tale
The long end of the Treasury curve saw a sell‑off that pushed the 10‑ and 30‑year yields up ~20 bp. The 10‑year is creeping toward 4.5%, while the 30‑year is near an imagined 4.65% peak. Market watchers say, “It’s a “carry trade” for the dollar because folks expect the core fiscal slide to give that lift.”
Equity – A Rally Worth a Standing Ovation
The SP and Nasdaq futures sprang past the 1% mark, proving that higher taxes don’t always bite brains. The stability of the electoral scoreboard removed the “Kirby‑ine” uncertainty, ensuring the market can plot an upgrade straight to year‑end.
What’s Next? Let’s Peek at the Balance Sheet
- Congress will be the next hurdle: GOP control over the Senate is a near‑certain 50‑seat threshold, while the House may still be up in the air.
- If the GOP lands a “red wave” (Presidential, Senate, House), the Treasury curve could shake again—far less of a ceiling on fiscal proposals and that would nudge the dollar even higher.
And if Congress still splits on the ballots, markets might sit around a Goldilocks vibe: fiscally penalized yet business‑friendly president and a fence‑post Congress keeping a lid on hype.
Aside from the Election, What’s Driving the Market?
Day’s releases are shy: the Euro zone PMI and September’s PPI won’t hammer big headlines. Meanwhile, the 30‑year U.S. supply is likely to command wave‑lengthy demand. ECB President Lagarde’s noise might be something, but it’s still talking about that “permanent tan” (whoops, we’re not surprised).
In short, the markets are already rallying around the idea that a Trump win will bring more “good” U.S. fiscal policy, while the world looks to see if Congress will take the page or crease it. Butter your toast. It’s the post‑election playground.
