Markets in early stage of panic as Trump leads

2 November, 2016

Investors are dumping risk assets this morning as latest ABC News/Washington post tracking poll showed Trump ahead of Clinton for the first time. Trump odds for winning the U.S. elections increased after FBI reopened its investigation into Hillary Clinton's use of a private email and he will maximize his leverage on the case with less than a week remaining to the election date.

Most major Asian equity indices fell by more than 1%, as Wall Street’s fear index “VIX” soared above 20 levels for the first time since September 12. The Mexican peso which has become the popular election proxy also fell this morning, declining by more than 4.3% for the past six trading days.

The dollar was also hit, plunging to three weeks low versus the euro and one month low against the swiss frank as U.S. 10-year treasury yields fell 7 basis points from yesterday’s highs.

Neither earnings nor economic data will provide market direction and it’s going to be a roller coaster ride for the next couple of days as a Trump win appears similar to a Brexit style reaction and probably more severe.

The post Brexit vote market reaction is still fresh in investors’ memory and no one wants to be caught on the wrong side of the trade, it will only take another one or two polls showing a Trump lead to boost markets anxiety and thus a steep sell off in equity markets and high beta currencies.

Gold is likely be the most wanted asset to hedge against political risks, and although it jumped 4% from October’s low, there still much potential to go higher from current levels.

The Fed is expected to stand pat on rates when they announce policy later today, and while recent round of economic data justifies a rate hike, the Fed doesn’t want to influence the presidential election outcome either way. In a recent report, I expected the Fed to deliver a strong signal on raising rates in December by reiterating a similar sentence from October’s 2015 statement:

“In determining whether it will be appropriate to raise the target range at its next meeting, the Committee will assess progress both realized and expected toward its objectives of maximum employment and 2 percent inflation.”

Although I still believe it’s possible, chances now stand at 50%. 

 

 


Source link  
Investors in cautious mode

Global equity and foreign exchange markets were relatively quiet on Wednesday as the U.S. financial markets were closed in observance of Independence Day...

Recession fears rise as trade war heats up

It has been an interesting first half for 2018. Economic fundamentals and politics took center stage as both fought for market influence.

Relentless rout for emerging currencies

While the speed of selling has slowed down compared to the early part of the week, emerging market currencies have continued to show...


Yuan weakness accelerates

Concerns over the possibility of an upcoming trade war are expected to remain front and center of investor focus once again today. Although the trading atmosphere is not quite as negative...

Lira jumps higher on Erdogan victory

All eyes are on the Turkish Lira this morning with the currency rallying sharply in early trade today, following the news that Turkish President Recep Tayyip Erdogan...

Trade war fears ease, but for how long

Global stocks have bounced back to life after China's central bank calmed markets by urging investors to stay calm and rational. While this move by...


Oil slips further ahead of OPEC meeting

Oil markets have suffered another blow today as US oil inventories showed an increase of 2.07M barrels (-2.1M exp), while at the same time US gasoline...

Trade war fears to dominate market

After imposing tariffs on steel and aluminum imports on its closest allies, the U.S. will be facing enormous criticism at the G7 summit on Friday in Quebec...

USD in focus ahead of Non-farm

The USD will be in focus tomorrow as it's a key test of strength with the upcoming non-farm payroll data on the US economy. So far the markets...


In the past 24 hours Bitcoin has gained 5.6% and reached $6728.56. Open your trading account with the best cryptocurrency brokers on special terms today.

In the past 7 days the EUR/USD pair has lost -0.5609% and is now at $1.1685. Start trading and making money on Forex today.

In the past 7 days Ethereum has gained 0.58% and is now at $478.512. Have the most popular cryptocurrencies compared online 24/7.


Top Brokers offering Forex Market Analysis



Forex Currencies Forecasts



Top 10 Forex Brokers 2018

# Broker Review
1easyMarketseasyMarkets90%
2FXTMFXTM88%
3HYCMHYCM86%
4FIBO GroupFIBO Group79%
5FxProFxPro78%
6FXCMFXCM73%
7AvaTradeAvaTrade69%
8HotForexHotForex68%
9XMXM68%
10Alfa-ForexAlfa-Forex66%
  


Share: