Originally published by AxiTrader
Markets Overview:
- Equities: Nikkei 225 (-0.03 %), Hang Seng (+0.29 %), CSI 300 300 (+0.43 %), KOSPI (+0.29 %), S&P/ASX 200 (+0.13 %)
- Commodities: Crude Oil $44.81 (-0.18 %), Brent Oil $46.17 (+0.04 %), Natural Gas $2.81 (-0.14 %), Gold $1284.95 (+0.26 %), Copper $230.55 (-0.17 %)
What traders are talking about:
Markets are calm as US polls open
It was relatively quiet in markets overnight, as voting in the United States has started. Most of the major Asian stock indices are slightly up on the day, and in FX, the dollar strengthened against the commodity currencies. The Aussie dollar came under pressure in the APAC session, following weaker than expected NAB business confidence data and Chinese trade figures.
US election timeline
Voting has already started at midnight ET (05:00 GMT), and the people of Dixville Notch (New Hampshire) were the first to vote on this day. Most polls will open between 6 and 8 AM Eastern time, which is 11:00-13:00 GMT. Expect the first rumours about exit polls to appear around 4pm ET (21:00 GMT), and around 6pm ET, the first poll will close in Indiana. Indiana is the home state of Trump's running mate Mike Pence, so he is expected to score a victory there. By 9pm ET (02:00 GMT), 40 of the 50 US states will have finished voting, and around 11pm (05:00 GMT), we could already have an idea who the next US president is.
NAB business confidence declines
The NAB business confidence index arrived at 6.0 in October, down from 8.0 in September. NAB noted that the survey is suggesting some moderation in the non-mining economic recovery. Aggregate level of business conditions declined in October, but remain at above average levels overall. However, other leading indicators disappointed as well, with forward orders falling significantly, according to NAB, while capacity utilisation eased as well.
China trade data disappoints
The Chinese trade balance stood at $49.06 billion in October, a smaller surplus than expected ($51.70 billion), but up from $42 billion in September. Chinese exports declined 7.3 % year-on-year (vs. 6.0 % expected), while imports fell 1.4 % year-on-year (vs. 1.0 % anticipated). Overall, rather weak numbers. What was interesting for AUD traders, was the decline in iron ore imports, as Australia exports large amounts of the commodity to China.
The Yuan weakened slightly overnight. The PBoC set the daily reference rate at 6.7817.
UBS on FX impacts from the US election
The Swiss investment bank wrote in a note that a Clinton victory will not have a large medium-term impact on FX and rates markets, but should support risk assets in the short-term. On the other side, UBS thinks that USD/MXN is the best place to express the view of a Trump victory.
NAB on USD/JPY
The Australian bank expects USD/JPY to rally to at least 107 on a Clinton victory, while the US 10-year yield would likely advance to 2 %. A Trump victory however, would push USD/JPY towards 97/98 and likely trigger intervention from the Bank of Japan. The BoJ has already issued a warning yesterday that it might be forced to intervene in the FX market should there be excessive moves in the Yen.
Economic Calendar:
- 09:30 GMT - UK Manufacturing Production
- 09:30 GMT - UK Industrial Production
- 13:15 GMT - Canadian Housing Starts
- 15:00 GMT - UK NIESR GDP Estimate
- 15:00 GMT - US JOLTs Job Openings
- 23:30 GMT - Australia Westpac Consumer Sentiment