Let the Games commence

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.

Jeffrey Halley

Jeffrey Halley

Senior Market Analyst, Asia Pacific, from 2016 to August 2022
With more than 30 years of FX experience – from spot/margin trading and NDFs through to currency options and futures – Jeffrey Halley was OANDA’s Senior Market Analyst for Asia Pacific, responsible for providing timely and relevant macro analysis covering a wide range of asset classes. He has previously worked with leading institutions such as Saxo Capital Markets, DynexCorp Currency Portfolio Management, IG, IFX, Fimat Internationale Banque, HSBC and Barclays. A highly sought-after analyst, Jeffrey has appeared on a wide range of global news channels including Bloomberg, BBC, Reuters, CNBC, MSN, Sky TV and Channel News Asia as well as in leading print publications such as The New York Times and The Wall Street Journal, among others. He was born in New Zealand and holds an MBA from the Cass Business School.
Jeffrey Halley
Jeffrey Halley

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