Asian equity markets calm
Asian markets have ground to a halt shortly, as we embarked on another 1.5 hours of exhilarating television in the form of the last US presidential debate. With 35% of American voters having already cast their votes early, this was probably the last chance for the US president to make a meaningful attempt to erode Mr Biden’s lead in the polls. I caveat this by saying that the election hinges on a small number of swing states, and it is to those voters that President Trump will be playing. Mr Biden, if the polls are accurate, merely needed to negotiate the debate without a significant slipup. A draw can be considered a win for Mr Biden.
The real race is the Senate one, which is still too close to call. Its importance is increasing, as financial markets have positioned themselves for a “blue wave” clean sweep. However, a Republican win for the Senate would likely be a temporary negative for markets, as it would leave Democrat tax hikes almost certainly dead in the water. To quote Gordon Gecko, “greed is good.”
Financial markets bounced around in noisy range trading overnight, mostly as the street finally prices in the reality that the US Senate may not pass a stimulus agreement agreed between Nancy Pelosi and Donald Trump. On the stimulus front, progress continues to be made, apparently. At the same time, however, I suspect that President Trump’s influence over the Senate Republicans is now weak at best, moving inversely to his slump in national polls. With quite a few Senate jobs on the line on November the 3rd, self-preservation has come to the fore.
Overnight, Wall Street equities traced out modest gains in directionless trade; US Treasury yields continued to firm, while the US dollar and oil both recouped losses from the previous day.
This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.