(Reuters) – U.S. President Joe Biden and his Republican rival Donald Trump traded attacks on abortion and their handling of the economy in their debate on Thursday night, giving voters a rare side-by-side look at the two oldest candidates ever to seek the U.S. presidency.
The 90-minute televised clash on CNN was taking place far earlier in the election cycle than any other modern presidential debate, more than four months before the Nov. 5 election.
ANDREW LILLEY, CHIEF INTEREST RATE STRATEGIST AT BARRENJOEY IN SYDNEY
“We haven’t seen the market move, but it’s not the U.S. session. But if you look at the prediction markets, the probability that Trump wins the election has risen since the start of the debate from about 55% to 60%. There’s a big debate on whether that would be good news or bad news for equity markets, but I can tell you that for bond markets, the consensus is clear. If Trump were to win the election, interest rates would likely increase.
“There is some movement (in bond market) but I’ll just say it’s relatively thin trading conditions and we will find out the real reaction tomorrow. But yeah, the movement so far has been higher yields in response to higher Trump probability.”
KARL SCHAMOTTA, CHIEF MARKET STRATEGIST, CORPAY, TORONTO
“Biden is turning in a disastrous performance, triggering a sharp rise in odds on a Trump victory. This is translating into a tumble in trade-sensitive currencies – the Mexican peso, Canadian dollar, and even the euro are dropping against the greenback, and Chinese equity markets are coming down hard as investors hedge against a more isolationist turn in the United States after the November election.”
MATT SIMPSON, SENIOR MARKET ANALYST, CITY INDEX, BRISBANE
“It’s like watching Statler and Waldorf argue a bingo ticket. Wall Street indices have crept higher over the past hour, which could be taken as a sign that Trump made the better case – as we all know he is Wall Street friendly.
“But this debate is unlikely to sway hardened Trump or Biden supporters, and few in between for that matter. Trump had the markets in the palm of his hands during his presidency. But that potency seems to have passed for now.”
REDMOND WONG, GREATER CHINA STRATEGIST, SAXO, HONG KONG
“The market is increasingly pricing in higher odds of a Trump presidency 2.0 after the worse-than-expected delivery by Biden during the debate. Bond yields are rising. Market is anticipating China-bashing is an election item. They have not talked much on the subject, that is in a sense good for the Chinese market.”
ANINDA MITRA, HEAD OF ASIA MACRO AND INVESTMENT STRATEGY, BNY INVESTMENTS, SINGAPORE
“Having watched the debate live, I doubt if it decisively moves the needle on any candidate’s prospects. The post election analysis raises questions about whether there’ll be last minute changes in candidacy. For now the election remains too close to call and could go down to the wire. I doubt if this decisively impacts the course of risk assets on way or another. But nervousness is likely to persist and implied vol could rise.
“What’s more, risk assets have been surprisingly resilient in the year to date amidst monetary tightening, and geopolitical frictions. As such, we remain ‘neutral’ across most asset classes whilst anticipating a modest rate cutting cycle from the Fed from September onward.”
JASON WONG, STRATEGIST, BNZ, WELLINGTON
“Biden came across poorly and the U.S. dollar increased … a Trump presidency means tariffs and crudely that means a stronger dollar. It shot up as soon as Biden started talking. On the other hand, it may be that it’s hard (for Biden) to remain a candidate with that kind of performance.”
BEN BENNETT, HEAD OF INVESTMENT STRATEGY FOR ASIA, LGIM, HONG KONG
“The debate has mainly focused on domestic issues and challenging each other’s records in office. We didn’t learn much more about foreign policy and potentially higher tariffs. There’s a long time before the November election so I’m not surprised the immediate market impact of the debate has been relatively small.”
(Reporting by Reuters markets team; Editing by Deepa Babington and Daniel Wallis)
