The Trump Trade

In the United States, presidential elections should be decided at the polls, not through an assassination attempt by a young shooter using his father's rifle from a rooftop. With a triumphant fist shown to the world while leaving the stage, Trump emerged politically stronger from the bloodbath. Betting markets now give him a 65% chance of becoming the next President. For financial markets, the most negative scenario of a Trump victory are higher bond yields due to his agenda likely to increase the deficit and revive inflation, with measures ranging from permanent tax cuts to sweeping tariffs. With this hopes for further rate cuts by the Fed would wane. International equities, including European ones, could suffer from tariffs and a stronger safe-haven status of the USD.