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Commenting on key financial assets, in an interview with Dubai TV, Mohamed Hashad, Chief Strategist at Noor Capital and the member of the American Association of Technical Analysts, highlighted that markets are closely watching the upcoming US presidential election.
Financial Assets Most Likely Affected by a Potential Trump Victory
Regarding the assets that might experience significant movements following the election, Hashad suggested that the US presidential election will impact various market sectors, including currencies, stocks, and commodities. He noted that analysts cannot precisely predict which tools will see strong movements. However, in his personal opinion, the euro is likely to experience significant volatility. Hashad pointed out that the euro could decline sharply if Trump wins and assumes office, potentially deepening economic disagreements within the Eurozone.
Hashad also expects a similar decline in French bond yields. He believes that France, in particular, among Eurozone countries, continues to suffer from a significant budget deficit and high debt levels. Therefore, he anticipates that the euro and European bond yields will be among the most vulnerable assets if Trump wins the presidency, leading to a greater shift of liquidity towards the US dollar and the American economy.
Trade War and Interest Rate Cuts
When asked whether a new wave of trade wars might occur if Trump wins, as seen previously, or if the global economic structure has changed since Trump’s first term, Hashad responded that he does not expect a return of the trade war. This was particularly evident in Trump’s election program, which highlights two critical plans: tax cuts and reducing the role of the federal government. This suggests that the US is likely to adopt an expansionary fiscal policy that could avoid a trade war. However, Hashad believes this will support Federal Reserve Chairman Jerome Powell’s policies regarding interest rate cuts, as such a trade war could result in higher cost related to future interest rates.
Oil Performance Amid Geopolitical Challenges – Chinese Economic Indicators
Regarding oil prices, which have seen notable positive movements recently due to the OPEC+ decision, but in light of weak demand and Chinese indicators, Mohamed Hashad, Chief Strategist at Noor Capital, responded to a question about whether the rise in oil prices is expected to continue and what the price range might be. Hashad personally believes that crude oil is weak without geopolitical tensions. One of the main reasons behind the recent rise in oil prices, and the primary reason for the increase after it hit its lowest level in 17 months, is the ongoing geopolitical tensions.
Markets periodically react to fears of supply shortages. If there is any relative calm or stabilization of the situation and a decrease in geopolitical tensions, Hashad believes we could see the price of a barrel of oil drop below $55, especially if Trump wins and returns to the White House, potentially reigniting the trade war. The markets could see further declines in oil prices, considering the recent positive indicators of China’s industrial activity. In response to a question about how these indicators might affect oil prices, Hashad said they had a significant but momentary impact. Analysts cannot deny that the Chinese economy is still struggling and suffering from a real estate crisis. Market participants believe that the stimulus plan proposed by the People’s Bank of China may be insufficient to support the markets or the recovery of the Chinese economy. In terms of impact, the stimulus plan has only had a minor, momentary effect on the markets. While there may be attempts for the markets to rise, Hashad expects the general trend for oil prices to remain downward.
Gold Performance – Will Bitcoin Thrive at the Expense of the Precious Metal?
In a related context concerning commodity prices, specifically gold, which moved within a limited range during early Monday trading in light of the US election results, especially since Trump is known to support Bitcoin, Hashad commented that all scenarios are now on the table, and nothing is ruled out regarding gold price movements. He expects significant movements in gold prices, and the markets could see notable rises in Bitcoin, potentially at the expense of gold. However, it is crucial to closely monitor the markets during Tuesday’s trading, as significant price changes, particularly in gold, could occur. Gold prices have somewhat distanced themselves from the peak recorded last week. Is a correction point possible? This is a valid question. In brief, a correction point is considered a bearish signal, which is true, but the precious metal could see new pricing at levels of $2710 per ounce and $2700 per ounce.
