Mumbai, 15 Jul (Commoditiescontrol): U.S. bond futures declined and the dollar strengthened on Monday as investors speculated that the recent attack on U.S. presidential candidate Donald Trump could enhance his chances of victory, injecting new political uncertainty into the markets.
Thin trading conditions were noted due to a holiday in Japan, with early movements limited to a modest rise in the dollar and a slip in Treasury futures. Historically, the prospect of a Trump win has led investors to push Treasury yields higher, anticipating that his economic policies could spur inflation and increase debt. Tariff proposals are expected to raise prices, affecting consumer spending, while migration restrictions could tighten the labor market and elevate wages.
PredictIt, an online betting site, showed an increase in the likelihood of a Republican win to 66 cents from 60 cents on Friday, while the odds for Democrats stood at 38 cents. This indicates that Republicans are currently viewed as twice as likely to win the election compared to Democrats.
The dollar rose 0.3% against the Japanese yen to 158.15, remaining below its recent peak of 161.96. The euro slightly declined to $1.0883, and the dollar index firmed to 104.20. Futures for 10-year Treasuries dropped 13 ticks, while cash bonds remained untraded due to the Japanese holiday. S&P 500 and Nasdaq futures showed little change.
In Asia, Japan's Nikkei was closed, but futures traded at 41,300 compared to the cash close of 41,190. The week is set to be data-heavy, starting with China's GDP, expected to show a slight slowdown in annual growth to 5.1% in the second quarter. Additional data on retail sales and industrial output for June are also anticipated. In the U.S., key figures include retail sales, industrial production, housing starts, and weekly jobless claims.
Federal Reserve Chair Jerome Powell is scheduled to speak later on Monday, likely addressing last week's subdued inflation reading. Market expectations for a rate cut in September have risen to 94% from 72% a week earlier. The European Central Bank is also meeting on Thursday and is expected to maintain rates at 3.75%, with another cut anticipated in September.
This week will see earnings reports from major companies such as Goldman Sachs, BlackRock, Bank of America, Morgan Stanley, Netflix, and Taiwan Semiconductor Manufacturing.
In commodity markets, gold held steady at $2,408 an ounce, just below last week's peak of $2,424. Oil prices saw slight gains, with Brent crude up 28 cents to $85.31 per barrel and U.S. crude rising 31 cents to $82.52 per barrel, following indications of progress on a ceasefire between Israel and Hamas.
These developments highlight the market's sensitivity to political events and economic data, setting the stage for a volatile trading week ahead.
(By Commoditiescontrol Bureau: 09820130172)
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