Bond markets in meltdown as Trump victory sinks in

Bond investors lost more than $1 trillion as Dow Jones industrial average finishes week at record high.

Over $1 trillion has been wiped from global bond markets as Donald Trump’s spending and tax cut plans prompts investors to step back from treasuries.

Investors are betting Trump’s administration will widen the deficit through a wave of spending leading to faster inflation, causing a stampede from bond markets and a shift into other securities.

The day Trump was elected, demand for the US government’s sale of $23 billion of 10-year notes fell to the lowest level since 2009, according to data from Bloomberg.

However, the blue chip Dow Jones industrial average saw its best week in five years on Friday as markets closed at record highs.

Bloomberg data also revealed the US Treasury index plummeted 1.91% this week - its largest drop since June 2009 - and the Bank of America Global Broad Market index also plunged 1.8%.

The surprise victory of Trump has also brought the US Dodd-Frank Act into question, as well as other stricter banking regulations.

Among his other election promises, Trump had campaigned on loosening Wall Street regulations, including capital requirements, the Dodd-Frank Act and the Volcker Rule.