Skip to content

CFDs are leveraged products. CFD trading may not be suitable for everyone and can result in losses that exceed your deposits, so please ensure that you fully understand the risks involved. CFDs are leveraged products. CFD trading may not be suitable for everyone and can result in losses that exceed your deposits, so please ensure that you fully understand the risks involved.

US elections 2024: ‘Trump trade’ at play as vote-counting gets underway

As the US election remains too close to call, markets are pricing in a potential Trump victory, causing Treasury yields and the US dollar to surge amid expectations of inflationary policies.

US Elections 2024 Source: Bloomberg images

Overview

While the US elections are still too early to call at current point in time, markets have been getting ahead to price for the Trump playbook in the likes of 2016. Treasury yields and the US dollar surged higher, reflecting mounting expectations that Trump’s inflationary policies may materialise. The US 10-year yields surge 18 basis point (bp) in early trading, while the US two-year yields are up 10 bp. All is not over, with further conviction of a ‘Red Wave’ ahead potentially seeing yields eyeing further upside, which may translate to a stronger US dollar.

US small-cap equity futures revealed an outperformance, being the beneficiaries from Trump’s "America First" policies and deregulation stance. In the Forex (FX) space, USD/MXN is up more than 3%, USD/JPY is up 1.4%. Other USD crosses were under pressure, with AUD/USD, EUR/USD and GBP/USD all down more than 1%. There are positive moves in the cryptocurrencies space as well, with Trump’s pro-crypto stance helping to lifting Bitcoin to a new record high.

These moves are not without basis. Early indications suggest that Trump have performed better-than-expected in areas where Republicans have not been so well-supported traditionally. While we can still argue that markets could be getting ahead of themselves to price for a Trump win, ongoing votes suggest that Harris has a narrower path to victory.

The hopeful path for Harris will be to reclaim all traditional Midwest battlegrounds (Michigan +15, Wisconsin +10, Pennsylvania +19), which will potentially offer her the exact amount of votes to secure her victory. This is provided that other traditionally Democratic states do not budge. Any turn of events from market expectations for a Trump win could be a surprise and drive huge reversals in markets, particularly in the US dollar.

US dollar index: gaining steam on expectations of a Trump win

The US dollar has surged close to 1% in today’s session, reversing all of its last week’s losses. The US dollar has been a beneficiary for a Trump win, with many of his policies around trade, immigration and spending deemed as relatively more inflationary.

A bounce off its 200-day moving average (MA) may seem to bode well for the US dollar’s upward bias, as its daily moving average convergence/divergence (MACD) continues to trade above the mid-line following a positive crossover on 1 October 2024. Ahead, the 105.32 level could be on watch next, where a trendline resistance will be retested.

US Dollar Basket Source: IG charts

Hang Seng unwinds all of its previous day's gains

The HSI is down 2.7% in today’s session, having unwound almost all of its previous day’s gains. Trump’s aggressive protectionist measures may be deemed to have a negative impact on trade activities with key trading partners, particularly with China in his crosshair. Much is still trading within a near-term consolidation pattern for now, but the 20,300 level will be put to the test, with any breakdown potentially unlocking fresh selling pressures to the 19,500 level.

Hong Kong HS50 Cash Source: IG charts

EUR/USD: attempting to defend upward trendline support

The EUR/USD has also seen some weakness in today’s session, as Trump’s trade policies around tariffs or restrictions on European goods could dampen Eurozone economic growth, hence weakening the euro. For now, buyers are attempting to defend a crucial upward trendline support at the 1.077 level, which may be key in keeping the broader upward trend intact. Failure to do so could see the pair head towards its June 2024 low at the 1.066 level next.

EUR/USD Mini Source: IG charts

IGA, may distribute information/research produced by its respective foreign affiliates within the IG Group of companies pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the research is distributed in Singapore to a person who is not an Accredited Investor, Expert Investor or an Institutional Investor, IGA accepts legal responsibility for the contents of the report to such persons only to the extent required by law. Singapore recipients should contact IGA at 6390 5118 for matters arising from, or in connection with the information distributed.

The information/research herein is prepared by IG Asia Pte Ltd (IGA) and its foreign affiliated companies (collectively known as the IG Group) and is intended for general circulation only. It does not take into account the specific investment objectives, financial situation, or particular needs of any particular person. You should take into account your specific investment objectives, financial situation, and particular needs before making a commitment to trade, including seeking advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit.

No representation or warranty is given as to the accuracy or completeness of this information. Consequently, any person acting on it does so entirely at their own risk. Please see important Research Disclaimer.

Please also note that the information does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. Any views and opinions expressed may be changed without an update.

Seize a share opportunity today

Go long or short on thousands of international stocks.

  • Increase your market exposure with leverage
  • Get spreads from just 0.1% on major global shares
  • Trade CFDs straight into order books with direct market access

Live prices on most popular markets

  • Forex
  • Shares
  • Indices

Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 15 mins.

Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 20 mins.

The Momentum Report

Get the week’s momentum report sent directly to your inbox every Tuesday for FREE. The Week Ahead gives you a full calendar of upcoming key events to monitor in the coming week, as well as commentary and insight from our expert analysts on the major indices to watch.

For more info on how we might use your data, see our privacy notice and access policy and privacy webpage.

You might be interested in…

Find out what charges your trades could incur with our transparent fee structure.

Discover why so many clients choose us, and what makes us a world-leading provider of CFDs.

Stay on top of upcoming market-moving events with our customisable economic calendar.