Market Uncertainty Rises with Trump Attack Amid Thin Trading

U.S. bond futures declined while the dollar firmed on Monday following an attack on presidential candidate Donald Trump, suggesting increased chances of his victory. This event introduced new political uncertainties into markets, affecting Treasury yields and investor sentiment. Meanwhile, global markets had limited trading activity due to a Japanese holiday.

U.S. bond futures slipped and the dollar firmed on Monday as investors bet on increased odds of a Donald Trump victory following an attack on the presidential candidate, injecting new political uncertainties into markets.

Trading was thin due to a holiday in Japan, and early market movements saw a modest rise in the dollar while Treasury futures slipped. Investors anticipate that a Trump win would push Treasury yields higher, given expectations that his economic policies would boost inflation and debt.

Proposals from Trump to impose tariffs on imports may drive prices up, affecting consumer spending. The labor market could tighten due to migration restrictions, increasing wage pressures. PredictIT showed higher odds for a Republican win, with the dollar gaining slightly against the yen and the euro. Key economic data from China and the United States, along with Federal Reserve Chair Jerome Powell's upcoming statements, are also under close watch.

(With inputs from agencies.)