Market rally to pause on election fatigue?

6 November, 2020

It has been a momentous week defined by anticipation, tension and drama around the US presidential election. The outcome of this historic election remains on a knife-edge, with Donald Trump and Democrat challenger Joe Biden going toe to toe in key swing states. Investors across the globe are likely to adopt a guarded approach amid the cliffhanger vote count with full unofficial results from key swing states - Pennsylvania and Georgia - expected later today. Although Biden may clinch the presidency with just one more state, the race for the White House remains too close to call.

Even if this becomes reality, concerns are elevated over Trump contesting the results of certain states, ultimately opening the door to more uncertainty. Given how officials have already warned that it may take days or even weeks for the final results amid the huge number of postal ballots, markets could be in for a rocky ride for the rest of 2020.

Asian shares were mixed this morning as investors awaited more clarity from the presidential election, while gains in Europe may be capped if market players turn defensive ahead of the US jobs report this afternoon.

US jobs data in focus


Away from US politics, all eyes will be on the US non-farm payrolls report released later today.

The headline figure is expected to have increased by 600,000 jobs in October after rising 661,000 in September.  This would make it the smallest gain since the jobs recovery started in May and give a clear indication that rising coronavirus infections are negatively impacting the economic recovery. The unemployment rate is expected to have dipped from 7.9% to 7.7% with average hourly earnings forecast to rise to 0.2% from the 0.1% seen in the previous month.

A disappointing jobs report is likely to hit sentiment towards the US economy and the threat of a contested election that reduces the possibility of another coronavirus rescue package in 2020 may rub salt into the wound.

Looking at the technical picture, the Dollar Index remains under pressure on the daily charts. Prices are trading below the 20 and 100-day Simple Moving Average while the MACD trades to the downside. A daily close below 92.70 may open a path towards 92.00 in the short to medium term. But should prices push higher and break above 92.70, the Index may venture back towards 93.30.


Source  
What's been moving Gold prices?13 Jan, 2021  

Gold prices are enjoying some relief, after falling by more than 7% from the two-month high of around $1960 that it posted last week. On a week-to-date basis...

Gold Weekly: Bearish momentum on the rise11 Jan, 2021  

The Gold market on the Weekly time-frame was in an extended uptrend until 2 August 2020 recording a higher top at 2074.87. This was followed...

A nerve-wrecking end to 2020?18 Dec, 2020  

Just two weeks before the curtains are drawn on 2020, and investors are still being made to wait on the ultimate fate of market-defining events...


How might the Fed's decision affect US markets on Wednesday?16 Dec, 2020  

US equity futures are holding steady ahead of the Fed's policy decision, after benchmark indices returned to positive ways on Tuesday...

EURGBP Daily: Bullish momentum on the rise9 Dec, 2020  

The EURGBP currency pair, on the D1 time-frame, was in a downward spiral until 23 November when a higher bottom was recorded at 0.88664, where Bulls started prevailing...

Another record high for US stocks?4 Dec, 2020  

Risk assets are looking to end the week, and the year, on a high. US stock futures are edging into the green, indicating the S&P 500 and the Nasdaq...


Technical outlook: Gold tumbles to 4-month low24 Nov, 2020  

After being trapped within a wide range for many weeks, Gold has finally broken below the stubborn $1850 support level. The primary culprits behind Gold's sharp

Calmer seas on Friday the 13th?13 Nov, 2020  

Asian stocks are mostly tracking Thursday's declines on Wall Street, with most US and European equity futures edging lower at the time of writing...

US Elections: Bye Bye "Blue Wave"?4 Nov, 2020  

It's still too early to make a decisive call, but markets appear to be paring back hopes for the so-called "blue wave". Expectations for a landslide win for Democrats...