The dollar and U.S. stocks rose in Asia on Wednesday as early results from the U.S. presidential election suggested the race is still too close to call, leaving investors guessing.
As expected, Republican Donald Trump won Indiana and Kentucky, while Democrat Kamala Harris took Vermont, according to Edison Research projections, as polls closed their doors in the first six American states.
Treasury yields climbed as some betting sites tilted in Mr. Trump's favor, while futures markets remained confident the Federal Reserve would cut interest rates by 25 basis points on Thursday.
Analysts generally believe that Mr. Trump's plans for immigration restrictions, tax cuts and steep tariffs, if implemented, will put greater pressure on inflation and bond yields than Mr. Harris's center-left policies.
“As the first results come in, while none of them are surprising, we see Treasury yields rise a bit, the dollar strengthen, bitcoin rise; sort of a classic Trump trade ” said Brian Jacobsen, chief economist at Annex Wealth Management.
“There is not much conviction in these movements; they seem to be small jolts.
Yields on the 10-year Treasury note rose to 4.34% from 4.28% and neared a four-month high of 4.388% hit last week. Two-year yields rose to 4.245%, from 4.189% late in the day in New York.
S&P 500 futures rose 0.5% in a choppy market, while Nasdaq futures added 0.2%. EUROSTOXX 50 futures rose 0.2%, while DAX futures rose 0.4%.
MSCI's broadest index of Asia-Pacific stocks outside Japan was little changed. Japan's Nikkei rose 1.1%, tracking Wall Street's gains overnight. [.N[]
In currency markets, the dollar index rose 0.6% to 103.98. The euro slipped 0.6% to $1.0867, after hitting a one-month high of $1.0937 overnight. The dollar firmed 0.5 percent to 152.61 yen, after hitting a low of 151.34. [USD/]
The dollar gained 0.3% against the offshore yuan to 7.1227 yuan. China is considered to be at the forefront of tariff risk, and its currency in particular is trading on a tightrope with implied volatility against the dollar at record highs.
China's stock markets rose to near one-month highs as investors expected a meeting of top policymakers in Beijing this week to approve local government debt refinancing and spending.
A stronger dollar combined with higher bond yields put pressure on gold prices, which fell 0.2% to $2,738 an ounce and moved away from a recent record high of 2,790 $.15. [GOL/]
Oil prices were lower in early Asian trading as markets nervously awaited the results of the US election. They increased overnight as a storm was expected to reduce US production in the Gulf of Mexico. [O/R]
U.S. crude oil lost 23 cents, or 0.3%, to $71.76 a barrel.
