Trump’s ‘Volfefe’ tweets move United States markets, impact rates

Trump’s ‘Volfefe’ tweets move United States markets, impact rates

Economic marketplaces can swing sharply right after US President Donald Trump tweets.

The top-ranked "market-moving words" found within impactful tweets buy the US President include - China, billion and products, the firm found. "Accordingly, a wide swathe of benefits from single-name stocks to full scale items have discovered their cost elements progressively obliged to a bunch of tweets from the president".

The strategists at the bank said that about 10 percent of the American president's tweets since he took office in November 2016 pertain to subjects of importance to U.S. markets. According to JP Morgan, since taking office in January 2017, Trump has tweeted more than 10,000 times and of late the pace has accelerated, with most of these relating to trade and monetary policy. It found that his tweets generally followed a stretch of volatility across global currency markets.

"Trade and monetary policy have become an increasing focus for the executive branch, and everything from casual sentiments to seemingly formal policy intentions have been disseminated, globally and instantaneously, via this carefully scrutinised social media platform", according to a press release from JP Morgan. Analysts at the USA financial house leveraged these results "along with supervised learning techniques to produce a classifier trained to spot market-moving tweets".

Bloomberg cited Citigroup quantitative foreign-exchange strategist Sukrita Chatterji's statistic that about "10% of the president's tweets since his November 2016 election pertain to subjects of importance to US markets".

The tweets are particularly likely to affect bond rate volatility.

However, most of Trump's tweets still fail to make an impact, with just 146 of around 4000 sent during market hours since 2018 moving the market.

The same goes for the bond market and for interest rates.

In early-August, Wall Street plunged (one of the many occasions it did so recently) when Mr Trump made a decision to ramp up his trade dispute with China.

Another interesting thing to note from the report is most of the tweets by Trump come in the afternoon between 12:00 pm to 2:00 pm with 1:00 pm tweet three times more likely. "Eastern Time is the most likely window within which a new remark will hit the tape, a time fortuitously coterminous with some of the best intra-day liquidity in United States rates markets", the report elaborated.

While the direction of price moves and their lasting power may be uncertain, Trump's tweets often spark a sharp reaction across asset classes.

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