Wall Street stocks hit a record high and investors dumped bonds as Donald Trump’s historic US election victory sent markets around the world scrambling to price in a new regime of trade tariffs and tax cuts.
The dollar surged the most in two years, racing higher against the euro, the yen and the pound on Wednesday as traders returned to so-called Trump trades in the expectation that the president-elect’s plans would boost stocks, push up inflation and reduce the pace of interest rate cuts.
As bond prices dropped, yields on the 30-year “long bond” reached 4.67 per cent, up 0.16 percentage points on the day, for their biggest move in two years.
“The knee-jerk thinking is that Trump is good for stocks and bad for bonds, and the market hasn’t disappointed on that,” said Jerry Cudzil, senior portfolio manager for TCW’s fixed-income holdings.
The higher yields helped the US Treasury attract strong demand for the sale of…
