Republican Victory Lifts Dollar, U.S. Equities, and 10-Year Treasury Yield Sharply – Currency Thoughts
Republican Victory Lifts Dollar, U.S. Equities, and 10-Year Treasury Yield Sharply
November 6, 2024
Donald Trump’s declared electoral votes topped the magical 270 much more quickly than had been expected. Republicans also recaptured a senate majority and lead in House seat contest with 57 still undecided. Trump has a 3.5 percentage point majority in the popular vote. Jill Stern and RFK Jr. combined siphoned off 0.8 percentage points of the popular vote. Trump is well on his way to capturing all seven so-called battleground states, with four of them already declared, and Nevada, Arizona and Michigan leaning in his direction.
The DXY trade-weighted dollar index leaped 1.8% to a 4-month high. The greenback gained 1.9% versus the euro and yen and 2.7% against the Mexican peso overnight.
The DOW gained over 1200 points soon after the opening bell. The 10-year Treasury yield jumped 20 basis points. Trump’s economic plans risk higher inflation and may limit the Fed’s scope for easing.
Crypto predictably has done well today, jumping and setting a new record high. Gold and oil have fallen 2.6% and 2.4%, but contrast.
Trump’s foreign policy agenda is a concern to Europe, and equity markets there have dropped in contrast to the U.S. rally.
Two central banks left their interest rates steady after policy reviews today. Bank Negara Malaysia‘s key rate has been at 3.0% since a 25-basis point hike in May 2023. The National Bank of Poland‘s rate has been 5.75% since cuts in September and October of 2023 totaling a full percentage point.
Euroland producer prices fell 0.6% in September, reversing a 0.6% rise the month before and bringing the 12-month rate of PPI decline to -3.4%, most since May. Energy costs fell 1.9% on month and 11.6% on year.
U.S. mortgage applications fell for a sixth straight week, as mortgage rates continued to climb.
German industrial orders increased 4.2% on September after dropping sharply in August. Orders were 1.0% higher than in September 2023.
Euroland’s composite and service sector purchasing manager indices improved in October to 2-month highs of 50.0 and 51.5, suggesting that a recession has been averted.
Britain‘s composite and service sector PMI readings were at 11-month lows of 50.0 and 51.6.
Russia‘s composite and service PMI scores improved to 2-month highs.
Copyright 2024, Larry Greenberg. All rights reserved. No secondary distribution without express permission.
Tags: Euroland PPI, National Bank of Malaysia, National Bank of Poland, Republican broad victory
ShareThisYou can leave a response, or trackback from your own site.
