On November 6th, the US presidential election became the focus of global markets, with significant fluctuations in various assets.
According to Xinhua News Agency, American media estimates that Republican presidential candidate Trump has received at least 270 electoral votes, securing a victory in the 2024 presidential election.
Today, global markets are returning to the 'Trump deal'. Among them, the US dollar, US Treasury bonds, and Bitcoin have surged, emerging market currencies have weakened, commodities such as crude oil and gold have weakened, and US stock futures have surged, just waiting for the boots to land. After Trump secured the victory, various assets experienced a slight decline in their gains and losses.
At present, the dust of the election has settled, and how it will affect various types of assets in the future has attracted global attention.
The market returns to Trump trading, with the US dollar, US Treasury bonds, and Bitcoin soaring
With Trump winning votes in multiple swing states, various assets are returning to Trump's trade.
Today, the US dollar index surged all the way, with a surge of 1.58% at one point, successfully breaking through the 105 level and reaching a nearly 4-month high. The market held its breath as it waited for the boots of the US presidential election to land.
Due to the consensus in the market that Trump's re-election may implement extremely loose fiscal policies to stimulate the US economy and larger scale trade protectionism, the market has returned to the "Trump trade", and the exchange rate of the US dollar against other currencies has significantly strengthened. Although the results have not yet been released, the exchange rate of the Chinese yuan against the US dollar has already reacted first, falling more than 900 points during the day and breaking below the 7.19 mark,
The Federal Reserve will end its two-day meeting this Thursday and is expected to cut interest rates by 25 basis points. According to the Fedwatch tool of Zhishang Institute, the probability of the Federal Reserve cutting interest rates by 25 basis points in November is 97.5%.
The yield of US treasury bond bonds of various maturities rose sharply. Among them, the yield of US 10-year treasury bond rose 15 basis points to 3.69%, and the yield of five-year treasury bond rose 13 basis points to 3.04%.
Due to Trump's support for cryptocurrency, the cryptocurrency industry is boiling. Among them, Bitcoin surged 8% in intraday trading today, reaching $75000 at one point, breaking the historical high set in March this year; Ethereum surged 6.87% to $2591.10; Dogecoin has skyrocketed by over 25%.
Trump has vowed that if he returns to the White House, he will make the United States the global cryptocurrency capital, establish strategic Bitcoin reserves, and appoint regulators who love digital assets, demonstrating that he is the most industry friendly candidate.
The futures of the three major stock indexes in the US continued to rise, with Dow Jones futures up 1.81%, Nasdaq futures up 1.82%, and S&P 500 index futures up 1.85%.
International oil and gold prices have fallen
Due to the strengthening of the US dollar index and the soaring yield of treasury bond, international oil prices fell sharply, and the current decline has expanded to 2%, to $70.5. Shanghai Energy Center crude oil futures closed down 0.56% at 532.7.
The rise of the US dollar index means that buyers holding other currencies will become more expensive for goods priced in US dollars, suppressing crude oil prices. At present, the crude oil market still faces pressure from oversupply.
The oil producing organization OPEC announced on Sunday that it has agreed to postpone its oil production increase plan, originally scheduled to take effect in December, by one month due to weak demand and increased supply from non OPEC countries putting pressure on the oil market.
A survey shows that OPEC oil production rebounded in October, with Libya resuming production despite Iraq's further fulfillment of its production reduction commitments to the broader OPEC alliance limiting production growth.
From the inventory situation, the latest data released by API shows that the cumulative inventory of crude oil in the United States is 3.132 million barrels, with an expected 1.8 million barrels. Especially with a crude oil inventory of 1.724 million barrels in Cushing, far exceeding expectations, and a significant accumulation, this has put pressure on oil prices. If the accumulation of crude oil is confirmed by the evening EIA data, the pressure for oil price correction will continue to increase.
Haizheng Futures pointed out that due to the accumulation of API crude oil and Cushing crude oil, Saudi Arabia has lowered the official price of oil sold to Asia in December. Demand concerns still exist, and weak medium-term fundamentals may drive the center of gravity of oil prices downward. We are paying attention to the release of EIA data and the Federal Reserve's interest rate decision.
Under the pressure of the strong US dollar, gold has also encountered certain pressure, which is consistent with the logic of crude oil, and the prices of commodities denominated in US dollars have fallen under pressure. Today, London spot gold prices fell 1.16% to $2711; The main CMX gold futures contract fell 1.03% to $2721.3.
How does it affect various types of assets?
At present, the dust of the election has fallen and Trump has secured a victory. How it will affect various assets in the future has attracted global attention. Based on previous expectations, it is currently the consensus among various assets that the market still favors US stocks, gold, and cryptocurrencies.
Billion dollar private equity firm Xingshi Investment pointed out that in the medium term, the US stock market has support, and the long-term US bond interest rate center is rising, but the US dollar has uncertainty.
Among them, in the US stock market, from a medium-term perspective, Trump's tax cut proposal is conducive to US economic growth and corporate profitability, which remains the main logic for the rise of the US stock market. Structurally, Trump's policy proposals are favorable for the financial, industrial, and technology sectors. But the current valuation of the US stock market is relatively high, and if Trump introduces extreme policies after being elected that lead to a decline in risk appetite, it may cause fluctuations in the US stock market.
US Treasury bonds, along with economic resilience, inflation expectations, and supply pressures, have jointly pushed up the central long-term US Treasury bond interest rate, and the US Treasury bond interest rate curve may become steeper. Firstly, recently released data shows that the US economy still has resilience, coupled with the Federal Reserve's interest rate cut cycle, the probability of a soft landing for the US economy has increased; Secondly, internal tax cuts, external tariffs, and stricter immigration policies have increased the potential secondary inflationary pressure that the United States may face; Thirdly, loose fiscal policies have raised concerns in the market about the supply of US bond interest rates.
The US dollar index, although the series of stimulus policies advocated by Trump have a driving effect on the US dollar index, the Trump team has expressed the hope to strengthen the competitiveness of the US manufacturing industry and exports by intervening in the weakening of the US dollar. The contradiction between policies has led to uncertainty in the trend of the US dollar index.
Although gold is under short-term pressure, due to frequent geopolitical conflicts and its anti inflation properties, the market still remains bullish on the medium to long term trend of gold.
China International Capital Corporation (CICC) research points out that there are two pricing logics for gold prices at the macro level that cross paradigms, namely inflation and finance. The former means that as US inflation rises, the US dollar depreciates internally, and gold appreciates relative to the US dollar. The fiscal logic is reflected in the synchronicity between gold prices and the US federal deficit rate. Continued fiscal expansion overdraws US dollar credit, increasing the allocation value of gold.
China International Capital Corporation (CICC) research believes that the United States has returned to the era of bipartisan consensus on a large fiscal policy, and the central interest rate will remain high for a longer period of time. Therefore, the demand for gold ETFs may be limited, but the space for central banks in emerging markets to purchase gold is expected to further open up from low levels. We believe that inflation, finance, and central bank gold purchases are expected to jointly drive the continuation of the structural bull market in gold, and the biggest risk to long-term gold prices may be AI.
Xingshi Investment believes that the performance of commodities is differentiated, and industrial products such as oil and copper are mainly affected by the supply and demand pattern. Gold is expected to maintain its strength in the long term. The impact on Chinese assets is limited, and the A-share market will still be dominated by me.
Compared to other assets, the response of Chinese assets to Trump's pre election trades in October was relatively weak, so the announcement of the election results may bring short-term fluctuations to domestic assets. However, considering that the market has a more comprehensive understanding of Trump's personal style and policy proposals, there may not be much room for expected trading in the future market, and the sustainability of this emotional disturbance should be weaker
CICC also stated that Trump's governing policies will have a certain impact on major asset classes, manifested as "a strong US dollar, gold neutrality, and rising interest rates". Reviewing the trend of the A-share market during the previous Trump administration, although China's trade protection and technology restrictions have caused some disturbance to the market in the short term, the performance of the A-share market in the medium and long term is still mainly determined by domestic economic fundamentals and policy responses.