Investors are piling into Trump trades as the former president was projected by AP to have won North Carolina, the first swing state to be called following Tuesday’s national vote.

Though counting is far from done and the race is too close to call, betting site Betfair puts Donald Trump's chances of securing an electoral college majority at 97%–98%.

Trump’s Republican party is projected to have flipped the Senate and appears likely to retain control of the House of Representatives, which would make it easier for Trump to pass legislation.

US two-year yields are up 6bp from late New York trading levels at 4.26%, while 10-year and 30-year yields have both surged 12bp, to 4.40% and 4.57%.

The slide in Treasuries reflects Trump’s pledge to impose huge import tariffs, which would fuel an upturn in inflation, and unfunded tax cuts, which point to wider budget deficits and more government borrowing.

Wall Street is well bid, however, with the S&P December 2024 contract last up over 1% on bets that a long drawn-out contest has been avoided, and given the prospect of deregulation and lower corporate tax rates. The Nikkei 225 is up 2.4%, while Hong Kong's Hang Seng index is down 3.1%.

In other Trump trades bitcoin has surged over 7%, while the Mexican peso has slumped more than 2% against the US dollar. The greenback is up around 1% versus the Swiss franc and sterling and 1.5%, 1.3% and 1.3% higher against the euro, Japanese yen and Australian dollar.

Source: IFR