SINGAPORE / TOKYO (Reuters) – US index and Australian dollar futures fell on Friday after US President Donald Trump tweeted that he and First Lady Melania Trump tested positive for coronavirus.
S&P 500 futures were down 1.18%, while risk appetite barometers such as the Australian dollar and Treasury yields also slipped.
The pan-European STOXX 600 Index dropped 0.7% at the start of the session.
Analysts' comments follow:
Chris Weston, Head of Research, Pepperstone
“The President of the United States has a disease that is killing people. Because of this, people minimize the risks.
The next question is how much it has spread (in the administration), which is of great importance for the elections. In the worst case, elections may be temporarily postponed.
But it really depends on what it is about. Are you talking about a situation where he got infected and does not appear in the debate? Either he got infected and uses it to say, “I survived, I am a fighter” – or he is dying … we have many questions and not many answers at the moment. “
Julian Vee, Investment Strategist, Credit Suisse (SIX: CSGN)
“The initial market reaction was negative, but I'm not sure if this will last.
After all, once the initial reflex reaction wears off, the market is likely to focus on what this might mean for the election. And so far, the rhetoric has been getting more positive over the last week or so. Our official baseline scenario is a confident victory for the Democrats, which is broadly in line with the latest polls. “
Khun Goh, Head of Asian Studies, ANZ
“At this stage, it is too early to talk about how this could affect the election results. The impulsive reaction of the markets was the sale, which is understandable.
The dollar was initially bought, but then they began to sell. I believe that as long as the president and first lady are in an acceptable state, these movements in the markets will come to naught. “
Naoya Osikubo, Senior Economist, Sumitomo Mitsui Trust Asset Management
“Trump is lagging behind Biden and has clearly failed to close the gap after the initial debate … I suspect that markets will tend to believe that Biden is likely to win the election.
It worries me that he will become even more aggressive towards China after he contracted the virus himself, as I got the impression that British Prime Minister Boris Johnson has become even more anti-Chinese in his views after contracting COVID-19. …
For now, it will be difficult for financial markets to maintain a risk appetite. “
Yako Sera, Market Strategist, Sumitomo Mitsui Trust Bank
“We now see typical risk aversion in trading, but as far as we know, Trump is not seriously ill. It is possible that by the time we reach (session start in) New York, the markets will calm down.
If Trump's symptoms are mild and he recovers quickly, support could increase, similar to what happened to Brazilian President Jair Bolsonaro.
Still, it hurts Trump's ability to campaign, and elections are running out.
Whether Trump or Biden, the biggest problem is uncertainty. Until we are sure who will win the elections, it is difficult for the markets to really calm down. “
(Vidya Ranganathan and Tom Westbrook in Singapore, Stanley White, Hideyuki Sano in Tokyo, Nikhil Nainan Kuryan in Bangalore. Translated by Elizaveta Zhuravleva. Editor Marina Bobrova)