How can investment pros stay on top of the president's tweets and respond to their power to spike or tank the markets? Analysts also found that the number of market-moving tweets from Trump's handle rose in the past month, with those including words such as 'China, ' 'billion, ' 'products, ' 'democrats, ' and 'great, ' most likely to affect prices.
"Exchange and money related approach have turned into an expanding center for the official branch, and everything from easygoing suppositions to apparently formal strategy aims have been scattered, all inclusive and quickly, by means of this deliberately investigated web based life stage", investigators driven by Josh Younger and Munier Salem composed.
When Donald Trump first tweeted in 2009, it was to harmlessly publicise his upcoming appearance on a late-night TV show.
"The president has produced more than 10,000 tweets since taking office, at a pace that has accelerated in recent months".
"My only question is, who our bigger enemy, Jay Powell or Chairman Xi?"
They found that the Volfefe Index can account for a "measurable fraction" of moves in implied volatility, seen in interest rate derivatives known as swaptions.
That is particularly apparent at the shorter end of the curve, with two and five-year rates affected more than 10-year securities. The bank found "the effect of tweets on the market is a real one".
Out of about 4,000 non-retweets coming during market hours from 2018 to today, about 146 of the tweets moved the market.
Surprisingly, Trump's 3 a.m. tweets are more common than 3 p.m. tweets, which is a headache for USA rate markets because overnight depth tends to be thin, according to CNBC.
The ramifications of @realDonaldTrump's market takes aren't so definitive to be of use in the design of systemic strategies, Citi cautions.
All three studies do come with important caveats that indicate that while the president's influence on markets is initially very significant, his long term impact is slight.
"And you will be extremely shocked that the numbers are many, many times what you think", Mr. Trump said.
The markets experienced deep dives in summer as Trump intensified its tariff war with China, yet the Dow is up 42% since the 2016 presidential election. Only the headline has been changed.