Tom Westbrook provides an update on the European and global markets for the day ahead.
Election Day has finally arrived, ending an acrimonious campaign marked by assassination attempts on Donald Trump and the swap of Kamala Harris for Joe Biden as the Democratic nominee.
From the outside, markets appeared stable in the home stretch and trading desks indicated that investors had reduced risks and settled in with a wait-and-see attitude.
In this worrying calm, the Australian central bank maintained its rates, as expected, and Knight's Choice won the Melbourne Cup.
Oil has been the main market mover in recent days, gaining nearly 3% on Monday after OPEC+ said it would delay a planned production increase for a second time.
U.S. polls indicate the race is incredibly close and gambling markets have tightened the odds in recent days, prompting financial markets to reduce their bets on a Trump victory or a Republican sweep of Congress and of the White House.
Strategists predict a rise in the dollar if Trump wins and a fall otherwise, except in relation to bitcoin, which is expected to rise if Trump wins, the latter being seen as more lenient on crypto regulation -currencies.
Implicitly, the implied volatility of options on the offshore yuan against the dollar has reached new heights, illustrating the tension and nervousness caused by a new protectionist turn on the part of the United States for world trade.
When the results come in, attention will focus on the most contested states: Georgia, North Carolina, Pennsylvania, Michigan, Arizona, Wisconsin and Nevada. Polls will close in Georgia at midnight GMT.
The winner may not be known for several days and Mr. Trump has signaled that he will try to fight back any defeat, as he did in 2020.
Main developments that could influence the markets on Tuesday:
– American elections
