Proactive Investors - The US dollar and bitcoin both gained after the assassination attempt on Donald Trump at the weekend.
Following the shooting in Pennsylvania on Saturday, where the former US President and expected Republican nominee for this year's election sustained an injury to his ear and the shooter and a spectator were killed, financial markets initially saw a moderate increase in demand for assets thought of as safe-havens, such as gold, but this did not last into Monday.
"The latest twist in the Presidential election had a bigger political impact than it did financial impact," said Kathleen Brooks, head of research at XTB, on Monday.
"There was a mild rush to safe havens, however, gold is now in retreat, US 10-year Treasury yields fell a mere 3 basis points and the dollar is also giving back earlier gains as we start the European trading session."
Bitcoin seemed to have had the biggest reaction to Trump’s shooting, jumping from the mid $57,000s on Friday to above $60,000 on Sunday and extending gain this morning to above $63,200.
"It is hard to know exactly why Bitcoin has reacted in this way: does a Trump victory increase the attractiveness of alternative assets?" said Brooks. "Does political discord and chaos boost crypto? Does the increased chances of a Trump win lead to fears about the future independence of the Federal Reserve, which also feeds into demand for crypto assets?
"This is a theme worth watching if President Trump can maintain this lead in the polls," said Brooks.
Jane Foley, senior FX strategist at Rabobank said there was "lot to digest" for financial markets.
"Market pricing, however, can only respond in a binary manner," she said, "for the markets, the complexities of the US political backdrop have been boiled down to the assumption that the weekend events will lead to an increased chance of Trump winning the November Presidential election."
The US dollar has gained ground this morning, which Foley said was "on the back of the assumption that a looser US fiscal policy and greater tariffs under Trump would be inflationary and could limit the degree of Fed rate cuts this cycle.
"That said, market expectations of a September Fed rate cut have been growing over the past couple of weeks on the back of a softening in US economic data, and an interview with Fed Chair Powell later today will ensure the outlook for monetary policy pre-election keeps its place in market headlines."