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LONDON, October 2 – President Donald Trump’s positive coronavirus test sparked a sell-off in the stock market and a move toward government bonds today as uncertainty soared just a month before the US election.
US equity futures fell more than one percent in London, while government bond yields fell as investors weighed the impact of the president’s illness and the lockdown on financial markets.
Investors, who have fueled a prolonged surge in global equity markets, were already nervous about the lack of progress on further US fiscal stimulus.
Indicators of stock market volatility were up, with the widely watched VIX index up almost 29 points, from around 27 points yesterday.
“The president of the United States has a disease that kills people. People are reducing risk because of that, ”said Chris Weston, head of research at Pepperstone in Melbourne.
Trump’s diagnosis comes at a particularly sensitive time in the election after this week’s bitter presidential debate.
“This damages Trump’s ability to campaign and the time is running out before the elections,” said Ayako Sera, a market strategist at Sumitomo Mitsui Trust Bank in Tokyo.
Meanwhile, 10-year US Treasury yields fell more than 1 bp to 0.66 percent, just above a one-month low, a classic signal from investors looking for cash. called safe havens.
Risk aversion was evident in the currency markets, and the Chinese yuan was trading abroad under special pressure. – Reuters
