LONDON, Sept 11 (Reuters) – U.S. stock futures faltered, the dollar was on the defensive and bond prices rallied, as markets reacted to a U.S. presidential debate in which Vice President Kamala Harris put Republican Donald Trump on the defensive.
S&P 500 futures fell 0.3%, as investors perceive Harris less likely to splurge government money or to cut taxes.
The presidential debate shed little light on fiscal policies, although betting markets swung in Harris’ favour after the event.
In a boost to the Harris campaign, pop megastar Taylor Swift said she would back Harris in the Nov. 5 election.
“With the dust settling on the Trump vs Harris presidential debate, it’s clear that the market saw this debate going to Kamala Harris,” said Chris Weston, head of research at Pepperstone.
LONDON, Sept. 11, Reuters – The U. S. A U.S. government shutdown caused stock futures to sputter, the dollar to strengthen, and bond prices to soar. s. Vice President Kamala Harris pushed Republican Donald Trump to the defensive during the presidential debate.
Investors were wary ahead of U.S. elections as the presidential candidates sparred over issues including immigration, the economy, abortion, and Trump’s legal troubles. S. inflation figures that may have an impact on the Federal Reserve’s decision-making process next week.
Bond yields, which are inversely correlated with prices, decreased as Democratic candidate Harris’ strong performance fueled expectations of a reduction in interest rates, while investors projected higher spending, which would raise rates in the event that Trump wins.
The benchmark yield for the euro zone bloc, the German 10-year yield, dropped 2 basis points (bps) to 2 point12 percent, a new one-month low, while the yield on US ten-year Treasury bonds dropped to 3 points6068 percent, the lowest since June 2023.
Due to President Joe Biden’s withdrawal in July, Harris entered the presidential race later than other candidates. Her strong debate performance furthered the reversal of trades made in anticipation of a second Trump presidency.
Investors believe Harris is less likely to cut taxes or spend government money, which is why SandP 500 futures fell 0.3 percent.
Fiscal policies were not much discussed during the presidential debate, but following it, betting markets moved in favor of Harris.
Pop sensation Taylor Swift announced that she would support Harris in the November election, which gave the Harris campaign a boost. five elections.
“It’s evident that the market saw this debate going to Kamala Harris,” said Chris Weston, head of research at Pepperstone, following the conclusion of the Trump vs. Harris presidential debate.
“We’re definitely not much smarter on that front, and this debate was never intended to be an exercise in getting into the finer points and specifics of the various policies. “. .
The index of dollars, which gauges the U.S. s. currency was down 0 point256 percent at 101 point38 when compared to six peers.
“If Trump were performing better, one would anticipate that the dollar would strengthen as a result of this. That must be how the market is viewing it, then. There is a slight bias in favor of Harris, according to Rob Carnell, the regional head of research for Asia-Pacific at ING.
In addition to remarks from Bank of Japan board member Junko Nakagawa, the yen gained over 1% to reach its highest level since late December at 140 points71 per dollar.
In a speech, Nakagawa reaffirmed that if inflation and the economy follow its projections, the central bank will keep raising interest rates.
Parts belonging to U. s. Along with a 2 percent decline in bitcoin, premarket trading saw a decline in cryptocurrencies and blockchain-related businesses.
Recognized as the pro-cryptocurrency candidate, Trump made his speech at the Bitcoin 2024 convention in Nashville in July.
INFLATION WATCH.
Investors are currently focusing on the U. s. Despite the Federal Reserve’s declaration that employment has become a higher priority than inflation, policymakers will be watching the Labor Department’s consumer price index report later on Wednesday for guidance.
A Reuters poll predicts that the headline CPI increased by 0 points 2 percent in August, which is unchanged from the previous month.
Although it’s widely anticipated that the Fed will lower interest rates next week, the extent of the cut is still up for discussion, particularly in light of the labor report’s mixed results on Friday, which made it unclear which direction the central bank might go.
“Much clearer signs of a slowdown or recession, particularly in the labor market, would be necessary to compel the Fed to take more aggressive action. Additionally, I don’t believe that was included in the most recent payroll report,” Carnell of ING stated.
At present, markets are factoring in a 65 percent probability that the U. S. the Fed’s decision on September, a 35 percent probability is assigned to a 50 basis point cut. central bank lowering rates by 25 basis points. 18, the CME FedWatch tool displayed.
Following a nearly 3% decline in the previous session, oil prices in the commodities market rebounded by 2% as a decline in U. S. crude stockpiles and worries that Hurricane Francis would cause disruptions in the U. s. production allayed worries about the lackluster demand around the world.
Futures for Brent crude increased by 2% to $70-point-64 per barrel, and U.S. S. To reach $67.21, West Texas Intermediate (WTI) crude saw a 2 percent increase.
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Lawrence White and Ankur Banerjee reported, while Shri Navaratnam, Jacqueline Wong, Kim Coghill, and Elaine Hardcastle edited.
