PARIS (Reuters) – The dollar, US bond yields and futures contracts on the New York Stock Exchange indices climbed on Wednesday as the first results of the presidential election in the United States showed a wide advances for Republican Donald Trump against his Democratic rival Kamala Harris.
This advance is, however, not decisive because the results of the seven so-called “pivot” states are still awaited, capable of swinging the vote to one camp or the other.
In Georgia, one of the key states where polling stations were among the first to close, Donald Trump was in the lead with 51.9% of the vote, compared to 47.2% for Kamala Harris, after counting 80, 2% of the estimated number of votes.
On the bond market, the yield on ten-year Treasuries jumped more than 14 basis points, to 4.4295%, a four-month high.
The rate on two-year US government bonds rose almost seven basis points, to 4.27%.
Donald Trump's economic program, which notably provides for a strengthening of customs duties, is seen by investors as being likely to revive inflation and worsen the massive budget deficit of the United States.
This means the U.S. government will have to issue more debt to cover the deficit, which would put upward pressure on yields.
In the wake of American yields, the dollar gained 1.4% against a basket of reference currencies to return to its highest level since mid-July.
Futures on the major American indices, for their part, signal an increase of 1.2% to 1.4% on Wall Street, which has already increased by more than 1% on Tuesday evening. The trend in Europe is also expected to be positive.
“Markets swung a little more resolutely in favor of a Trump victory between midnight and 1 a.m. This appears to be due to the good news in Georgia and Florida,” notes Neil Wilson, market analyst at Finalto.
“The markets are saying that we could know the result fairly quickly, rather than having to wait several days to have the answer to the election,” observes Jamie Cox, associate director at Harris Financial Group.
“That's what worried the markets the most, the possibility of a long and drawn-out fight to see who will win,” he adds. “Being able to get a decisive winner, whoever it is, will be good for the market and that's what's being reflected in futures right now.”
(Written by Blandine Hénault, with the Reuters finance and markets team, edited by Jean Terzian)
