Bitcoin Surges Amid Political Turmoil
The recent assassination attempt on Donald Trump has led to a significant rise in Bitcoin prices, reflecting market speculations about his potential win in the upcoming presidential election. Traders view Trump as pro-crypto, fueling optimism for Bitcoin. According to AJ Bell, Bitcoin has risen 4% to $62,580.20, recovering from earlier declines. Investment analyst Dan Coatsworth notes, “Trump’s strengthened position has ignited traders who foresee benefits for Bitcoin if he returns to power.”
Impact on U.S. Treasury Yields and the Dollar
The potential for Trump’s victory in the November elections could drive up U.S. Treasury yields, particularly long-dated ones, as per UniCredit Research analysts. Additionally, this scenario may bolster the dollar’s value. However, corporate credit spreads are expected to remain unaffected.
Currency Market Reactions
Rabobank senior currency analyst Jane Foley highlights that Trump’s increased chances of winning have positively impacted the dollar. A Trump win is associated with looser fiscal policies and higher tariffs, which could inflate the dollar. However, this impact is tempered by the possibility of a U.S. interest rate cut as early as September.
Gold and Base Metals Outlook
Gold futures fell 0.5% to $2,408.2 a troy ounce, maintaining levels above $2,400. JPMorgan analysts suggest that weaker U.S. labor markets and a dovish Federal Reserve could further support gold and silver prices. Copper and aluminum also saw slight declines.
Gilt Yields and U.K. Inflation Data
Gilt yields remained relatively unchanged as investors await upcoming U.K. inflation data. Analysts at Bank of America predict that any surprise in services inflation could influence the timing of the Bank of England’s interest rate decisions.
Dollar Strength and Chinese Economic Data
The dollar edged higher, supported by a fall in equities after weak Chinese economic growth data. ING currency analyst Francesco Pesole notes limited market turmoil following the assassination attempt on Trump. Market expectations of a September Fed rate cut are also influencing dollar movements.
Indonesian Rupiah and External Factors
Lloyd Chan from MUFG Bank reports a downside bias for the Indonesian rupiah, citing factors such as a patient Fed, Middle East tensions, and Indonesia’s political transition. Bank Indonesia is expected to maintain rates this year to stabilize the rupiah.
Oil Prices and Market Sentiment
Oil prices dipped slightly as the U.S. dollar strengthened following the assassination attempt on Trump. Both Brent and WTI saw minor declines, with market analysts from ING highlighting the need for new catalysts to drive speculative buying amid demand concerns.
China’s Economic Challenges and Policy Measures
China’s latest economic data show supply-side momentum but demand-side challenges. Chaoping Zhu from J.P. Morgan Asset Management emphasizes the need for consumer confidence and potential easing from the PBOC once the Fed cuts rates. Further policy support is anticipated.
Supportive Policies in China
Goldman Sachs analysts expect more supportive policies from China, especially in fiscal and housing sectors, to counter weak domestic demand. Upcoming political meetings could introduce additional measures to boost economic growth.
Increased Odds of Trump’s Election Victory
Swissquote Bank analyst Ipek Ozkardeskaya states that the assassination attempt has raised Trump’s chances of winning the election to 67%. Despite concerns about political violence, this incident has strengthened market expectations of a Trump victory, boosting Bitcoin and stabilizing the dollar.
