Financial Markets Update: US Presidential Election Edition

What’s Happening Today?

Financial markets are in a state of anticipation as the US presidential election takes the spotlight. Latest polls indicate a tight race between the candidates. Here’s what to look out for today:

  • US Economic Calendar: Keep an eye on the Goods Trade Balance data for September and the ISM Services PMI report for October.
  • US Treasury Auction: The US Treasury will hold a 10-year note auction later in the day.

    US Dollar Performance This Week

    The US Dollar has seen some fluctuations against major currencies this week. Here’s a breakdown of the percentage changes:

  • USD vs. EUR: -0.41%
  • USD vs. GBP: -0.35%
  • USD vs. JPY: 0.17%
  • USD vs. CAD: -0.23%
  • USD vs. AUD: -0.67%
  • USD vs. NZD: -0.05%
  • USD vs. CHF: -0.35%

    Election Update

  • Poll Results: TIPP, Ipsos, and Atlas Intel polls show varying leads for the candidates.
  • State of Play: Trump leads in some swing states like Arizona and North Carolina, while Harris closes the gap in Nevada, Georgia, and Pennsylvania.
  • Market Response: US stock index futures trade higher, and the US Dollar Index stabilizes below 104.00.

    Reserve Bank of Australia Announcement

    The RBA kept the policy rate unchanged at 4.35% as expected. Key points from the statement:

  • Inflation Outlook: The RBA aims to achieve sustainable inflation levels by 2026.
  • Policy Stance: Ready to act if the economy faces unexpected downturns.
  • AUD/USD: Showed positive movement after the RBA decision, trading around 0.6600.

    Market Movements

  • China Data: Caixin Services PMI improved to 52 in October.
  • EUR/USD: Reached two-week highs but retraced to around 1.0880.
  • GBP/USD: Consolidating near 1.3000 after a bullish start to the week.
  • USD/JPY: Holding steady above 152.00.
  • Gold: Trading below $2,750 after a quiet day.

    Risk Sentiment FAQs

    What is "Risk-On" and "Risk-Off"?

  • Risk-On: Investors are optimistic and willing to take risks, leading to asset price increases.
  • Risk-Off: Investors turn cautious, preferring safe-haven assets like Gold and major government Bonds.

    Impact on Currencies

  • Risk-On Currencies: AUD, CAD, NZD tend to rise due to commodity demand.
  • Risk-Off Currencies: USD, JPY, CHF strengthen as safe-haven assets.

    Stay tuned for more updates as the US election unfolds and market dynamics evolve.

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