SINGAPORE (Reuters) -Saturday's shooting at U.S. former President Donald Trump's election rally raises his odds of winning back the White House, and trades betting on his victory will increase this coming week, investors said on Sunday.

Trump was shot in the ear during the rally in Pennsylvania on Saturday in what the authorities were treating as an assassination attempt. Trump, his face spattered with blood, pumped his fist moments after the attack and his campaign said he was fine after the incident.

Before the shooting, markets had reacted to the prospect of a Trump presidency by pushing the dollar higher and positioning for a steeper U.S. Treasury yield curve, and those trades could strengthen in the coming week, said Rong Ren Goh, a portfolio manager in the fixed income team at Eastspring Investments in Singapore.

The first shooting of a U.S. president or major party candidate since a 1981 assassination attempt on Republican President Ronald Reagan could upend the Nov. 5 rematch between Republican Trump and President Joe Biden, a Democrat, which has been tight in opinion polls.

"The election is likely to be a landslide. This probably reduces uncertainty," said Nick Ferres, chief investment officer at Vantage Point Asset Management, citing polls that showed a surge in support for Ronald Reagan after a 1981 assassination attempt.

World leaders and U.S. politicians condemned the shooting, while some industry executives, including Tesla chief Elon Musk, declared their support for Trump.

Since a shaky performance against Trump in a presidential debate two weeks ago, Biden has faced growing doubts from donors, supporters and fellow Democrats about his ability to beat Trump and keep up with the demands of the job.

Immigration and the economy have been the main issues for U.S. voters and, according to Reuters/Ipsos polls, they see Trump as the better candidate for the economy, even as Biden's White House seeks to benefit from a solid economy with inflation slowing and unemployment low.

Under Trump, market analysts expect a more hawkish trade policy, less regulation and looser climate change regulations.

Investors also expect an extension of corporate and personal tax cuts expiring next year, fuelling concerns about rising budget deficits under Trump.

Trump said in an interview in February he would not re-appoint Federal Reserve Chair Jerome Powell, whose second four-year term as chair will expire in 2026.

Michael Purves, CEO of Tallbacken Capital Advisors in New York, believes a Trump victory could put upward pressure on Treasury yields, especially if the former president follows through on pledges to cut taxes, raise tariffs and deport illegal immigrants - actions some investors believe could cause a resurgence of inflation. Yields move inversely to bond prices.

Potentially adding to the inflationary cocktail is a Fed that is expected to ease monetary policy over the coming year, Purves said.

"If (Trump) wins and does this stuff he said he is going to do, you are going to see a much bigger selloff in the back-end of the bond market," he said. "I think the bond market is the big (election) trade this year, rather than equities."

Longer-end Treasury yields have risen alongside the odds of a second Trump administration.

While the moves in the still-inverted Treasury curve have primarily been driven by changing expectations about the Fed's first rate cut in this cycle, the gap between 2-year and 30-year notes has narrowed to a negative 6 basis points from a negative 30 bps around the time of the Biden-Trump debate.

The more closely watched gap between two- and 10-year Treasury yields is at a negative 27 basis points, half the levels three weeks ago.

"Trump has always been more 'pro-market.' The key issue looking forward is whether fiscal policy remains irresponsibly loose and the implication that might have for (renewed) inflation and the future path of interest rates," said Ferres.

Stock prices have been rising. Both the S&P 500 and Dow Jones Industrial Average indexes hit record highs on Friday and the S&P 500 is up 18% this year.

"Around the five presidential elections of the last 20 years, CEO confidence, consumer sentiment, and particularly small business optimism have shifted more favorably in response to Republican victories than Democratic victories," analysts at Goldman Sachs wrote.

"To the extent improved sentiment leads to an increase in spending and investment, a Trump victory could boost the earnings outlooks for some firms even without substantial policy changes."

Soon after the shooting, billionaire hedge fund manager Bill Ackman endorsed Trump. Musk also endorsed Trump, calling him "tough" on his social media platform X.

Some investors believe the impact of the shooting will be comparatively small, especially on equity markets,

"Stock traders are not particularly good at pricing in events with a nebulous impact on revenues, earnings, cash flows, etc. and this weekend's events fall into that category," said Steve Sosnick, chief strategist at Interactive Brokers in Greenwich, Connecticut.