Democratic sweep of US Congress fuels bets to curb Trump's agenda
Nasdaq and S&P 500 futures fell early but rebounded, while the dollar lost strength and the 10-year Treasury fell to 4.93%, according to Bloomberg.
BY THE X-TRADER NEWS NEWSROOM · REPORTING FROM BLOOMBERG · 2 MIN
A Democratic sweep of the United States Congress has sent global markets into a swing. According to Bloomberg, the predominant reading among investors is that the result should put the brakes on President Donald Trump's agenda, which keeps political news at the center of short-term decisions.
In the forward contracts market, the Nasdaq 100 advanced 0.3%, and the S&P 500 gained 0.2% in the derivatives that accompany it. Both fell before recovering, according to the agency.
In exchange, the dollar weakened against the main currencies. In the interest market, the 10-year US Treasury yield fell 3 basis points to 4.93%.
In Europe, the Stoxx 600 index rose 0.6%. In Asia, the stock indicator was practically unchanged, according to Bloomberg.
The backdrop is the dispute over the direction of American economic policy. Bloomberg, however, does not detail in the facts gathered which Executive measures would be most affected if Congress limits the presidential agenda.
What changes for the investor
If the reading of the brake on the presidential agenda is confirmed, the main effect for those who invest is less predictability regarding measures that the Executive intended to approve, something that tends to be evaluated differently by sectors and asset classes. In this scenario, the weaker dollar and falling long interest rates, recorded in the same trading session, may indicate that part of this debate is already being priced in. The data reported, however, covers a single trading session and does not represent a trend. Those who follow Nasdaq, interest rates and exchange rates tend to observe the next legislative developments before drawing conclusions.
Automatically translated from Portuguese.
