Markets are trading downwards this morning as investors grapple with Trump’s unsuccessful appeal of Obamacare. The US republican president failed to persuade the Republican congress of his new healthcare plan, thus emphasising the rift within the Republican party.
The unity of the party is of grave importance to bullish investors, as Trump’s pro-business agendas must pass through congress before implementation. Since the president’s volatile relationship with his fellow party members looks to be strained, many investors are turning bearish, losing faith in Trump’s ability to pass proposals.
Volatility in the market is climbing steadily. Price swings are often a healthy sign in markets and the return of volatility is a welcomed with open arms.
The dollar is pairing gains this morning. The greenback is tantalisingly close to the pre-Trump era. The euro is inching upwards on the back of the weaker dollar. The EURUSD is at $1.087. As the dollar diminishes, bonds are edging upwards as investors are seeking safety in government bonds. The yield on the 10-year US treasuries, which moves inversely to price, fell 5 points.
Equities are suffering as the expectations on Trump’s abilities fade. The weaker dollar dragged down Asian equities. The negative vibes then spread to European and US indices, all trading downwards this morning.
- CAC 40 down 0.67% at €4978.50
- DAX 30 down 0.87% €11996.00
- FTSE 100 down 0.8% at £7201.00
- S&P 500 down 0.8% at $2323.25
- DJ 30 down 0.65% at $20424.00
- Nasdaq down 0.79% at $5329.25
Safe-havens like gold and yen are trading upwards as investors reshuffle their positions to seek refuge. Gold is up more than 1% at $1257.04. USDJPY is down 0.9% at ¥110.25.
Crude oil is down, pairing much of the gains in made last week. The commodity is trading at $47.52, a 1.6% decrease this morning.