ECB and Trump protagonists of the markets, here's why

Central banks and prominent political events dominate the financial markets today: on the one hand the words of Eurotower representatives on potential rate cuts, on the other Trump's victory in the primaries in Iowa are attracting the attention of investors.
The markets today, and in general at the beginning of 2024, are in turmoil and several key economic, financial and political events can shake the world stock markets.
Asian stocks hit a one-month low in today's closing session, U.S.
stock futures slipped and the dollar rose, while still somewhat hawkish comments from central bankers tempered expectations for rate cuts.
interest.
Now traders are waiting to hear from the influential Christopher Waller of the Fed.
Meanwhile, Trump has gained prominence again with his landslide victory in the Republican primaries in Iowa.
China and the Red Sea also remain in the background, the undisputed protagonists of the current complex and potentially explosive geopolitical and financial context.
The markets today start again from these key factors, with the latest statements from the ECB and Trump in the spotlight.
Rate cuts, what message from the ECB? The US dollar rose to a one-month high as Treasury yields rose and Asian shares fell after very cautious comments on ECB rate cuts pushed back bets that the cost of borrowing was imminent and wide.
read also What is the ECB about to decide on rates? Yields on the 10-year U.S.
Treasury and monetary policy-sensitive 2-year debt rose about six basis points each.
European bonds sold off on Monday after ECB officials rejected market bets on rate cuts.
Bundesbank President Joachim Nagel said it was too early to discuss cuts and Austrian central bank governor Robert Holzmann warned not to aim for a decrease at all this year due to persistent inflation and geopolitical risks.
These tones echo previous comments by Christine Lagarde who warned that it is too early to talk about reducing financing costs.
“The result…was to see money markets reduce the implied probability of a 25 basis point ECB cut in March to 26% from 40%,” explained Ray Attrill, currency strategist at NAB.
Two-year German bunds rose more than 7 basis points to 2.6% and 10-year bunds rose 5.4 basis points to 2.2%, providing support to the euro, which rose to a three-year high weeks against the Swiss franc.
The strengthening dollar pushed the euro down about 0.3% to a one-week low on the greenback at $1.0913 on Tuesday.
Trump returns to prominence Former Republican President Donald Trump won the Iowa caucus by about 30 points over his closest rival, setting a new record for margins of victory in the Iowa Republican caucus.
Florida Gov.
Ron DeSantis came in second, followed closely by former South Carolina Gov.
Nikki Haley.
Entrepreneur Vivek Ramaswamy ended his presidential campaign and endorsed Trump after finishing fourth.
read also 2024 US primary elections: results, candidates and polls.
Trump wins in Iowa A return of the tycoon to the White House is not at all ruled out and is today assessed as one of the risks to global political and financial stability by several analysts.
For this reason, events in the USA are now more closely watched than ever by investors, who are preparing for a year full of surprises with the epilogue in November, when the new president will be elected.
Trump's performance reflects his popularity among Republican voters, even after two impeachments, his involvement in the January 6, 2021 attack on the U.S.
Capitol by a mob of supporters, and his 91 criminal charges for attempting to overturn the 2020 election.
Nearly two-thirds of caucus attendees embraced his false claims of voter fraud, saying they didn't think Biden had legitimately won the presidency.
More than 60% said Trump would still be fit to serve as president even if convicted of a crime.
All this heralds instability and tension in the world's largest power according to various political and economic analyses.