There is a lot to digest from the shocking assassination attempt on former President Trump over the weekend. US politics, which was already very divided, has now been marred with violence, Rabobank’s senior FX strategist Jane Foley notes.

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“Market pricing can only respond in a binary manner and, for the markets, the complexities of the US political backdrop have been boiled down to the assumption that the weekend events will lead to an increased chance of Trump winning the November Presidential election. That said, market expectations of a September Fed rate cut have been growing over the past couple of weeks.”

“The recent focus of US politics though has been on the divisions within the Democrat party and specifically on the pressure on President Biden to drop his bid to retain the White House this year. The assassination attempt has triggered a round of accusations that the Democrat campaign has been too focused on criticising Trump. There is still plenty of time for the pressures on Biden to grow.”