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Intermarket:
- SP Futures 3379 (+0.53%)
- EUSTXX 3091 (-0.13%)
- Crude Oil 38.55 (+2.33%)
- US 10YR 0.88 (+0.33%)
- EurUsd 1.1653 (-0.50%)
- UsdJpy 104.92 (+0.47%)
- DAX 12082 (+0.10%)
Too close to call, USD bid, liquidity still thin as traders await more clarity, but bookmakers are now starting to price in a Trump victory. At the time of writing, Biden has 223 votes vs 212 for Trump. It seems the Democratic Party has retained the House, but the outcome of the Presidential election and the Senate election is still up in the air. The chance of a Democratic sweep has decreased, while the possibility of Trump remaining President and a divided Congress has increased. It might be all the way until Friday, before a final result is ready. Leveraged names reportedly bought USD across the board.
In other news, EU negotiator Barnier will be updating senior EU MPs today on the trade agreement. Both sides are still working on overcoming key sticking points – access to Britain’s fishing waters, future common standards and policing the final deal. A European Commission spokesman said that negotiations are continuing this week in Brussels and they’re very intensive negotiations working towards an agreement. There’s a lot of work still to be done.
All this means trading will likely remain volatile, with thin conditions and headlines driving price action.
Matters that Matter:
• Trump leads in Florida and other vital battlegrounds, Biden pins hopes on ‘blue wall’
• Betting market odds flip to favour Trump over Biden in U.S. election
• EU and UK Brexit negotiators to call for more talks - The Times
• BoJ Gov Kuroda – Won’t hesitate to ease more if needed, COVID resurgence in U.S., Europe a concern
• Kuroda says BOJ will help keep FX moves stable, watching U.S. election fallout
• CN Oct Caixin Services PMI, 56.8, 54.8 prev, hiring picks up
• AU Sep Retail Sales MM, -1.1%, -1.5% f’cast, -4.0% prev
• NZ Q3 HLFS Unemployment Rate, 5.3%, 5.4% f’cast, 4.0% prev
• OPEC and Russia study deeper oil cuts - two sources
• QQ.Com: Ant Group IPO expected to be delayed by half a year: funds for IPO will be returned to investor
Majors 1-Day View:
USDJPY
- With prices swayed by the US election, a purely technical outlook is of little use. However, at the time of writing, USD strength is noted, as prices posted a 9-Day high in Asia trade.
- Election results uncertain, could be contested by both camps.
- Opex a factor today: 105.00 1.4Bln, 105.25-50 1.5Bln.
EURUSD
• With prices swayed by the US election, a purely technical outlook is of little use. However, at the time of writing, USD strength is noted, with prices posting a 6-Wk low during Asia trade and prices remaining within the bottom 50% of today’s range.
• Bias still down on ECB easing bias and lockdowns spreading across Europe.
• Markets still need to price in the “shock” of no blue wave.
AUDUSD
• With prices swayed by the US election, a purely technical outlook is of little use. However, at the time of writing, USD strength is noted as prices first posted a 2-wk high but then retreated towards yesterday’s lows.
• Markets shocked on the absence of a blue wave.
• Expect more volatility as results come in.
GBPUSD
• With prices swayed by the US election, a purely technical outlook is of little use. However, at the time of writing, USD strength is noted as prices first posted a 8-day high but then retreated towards yesterday’s lows.
• Brexit still in limbo, focus on COVID-19 mass testing in Liverpool as Johnson faces opposition on lockdowns.
• US Elections main risk.
FX Relative ATR Grid
Comment: Ranges have started to expand ahead of the Election results. Trading conditions will remain volatile as votes come in, ranges to remain wide.
FX Relative Strength Grid
Comment: current signals have been reversed into Asia trade and into Wednesday the predominant signal is USD strength.