Andrew Canobie, head of fixed income for Franklin Templeton Australia, said the initial market response to the U.S. midterm elections was a modest move of capital out of equities and into bonds, pointing to a degree of risk aversion. He added that if Democrats were to control Congress, markets could read that as a constraint on U.S. President Donald Trump’s growth agenda, particularly in artificial intelligence and the resources sector. Canobie also said Australia’s three-year government bond yield has fallen 15 basis points from the start of the week, as traders increasingly think the Reserve Bank of Australia may be nearing the end of its rate-hiking cycle. The remarks were cited by ChainCatcher.
ChainCatcher reported that Andrew Canobie, head of fixed income at Franklin Templeton Australia, said the initial financial market reaction to the U.S. midterm elections could be summed up as a slight shift in capital from stocks into bonds, reflecting some demand for safer assets.
He added that if Democrats control Congress, markets may see that as a check on U.S. President Donald Trump’s growth agenda, especially in artificial intelligence and the resources sector.
Canobie also said Australia’s three-year government bond yield has dropped 15 basis points since the start of the week, as traders increasingly believe the Reserve Bank of Australia may be close to ending its rate hikes.
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