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.