Breaking News
0
Ad-Free Version. Upgrade your Investing.com experience. Save up to 40% More details

Dollar Down, Futures Head Higher On Election Day

By Boris SchlossbergForexNov 03, 2020 07:00AM ET
www.investing.com/analysis/election-day-and-markets-feel-happy-200543320
Dollar Down, Futures Head Higher On Election Day
By Boris Schlossberg   |  Nov 03, 2020 07:00AM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 

Market Drivers Nov. 3, 2020

  • Equities remain bid
  • High beta FX rises as well
  • Nikkei 1.39%
  • Dax 2.01%
  • UST 10Y 0.87
  • Oil $37.07
  • Gold $1898/oz.
  • BTC/USD $13518

Asia and the EU

  • AUD RBA lowers the rate to 0.1%

North America Open

  • USD Consumer Optimism 10:00

On Election day the markets were far more sanguine than the general population with stock index futures up and the dollar down as risk-on flows dominated in Asian and early European sessions.

Stock index futures were up by more than 1% as markets continued to price in a definitive result with VIX futures also signaling that traders expected little volatility ahead. Just as with Brexit and the US elections in 2016 such nonchalance may prove costly if the actual results show a much less clear outcome that may have to be litigated in courts.

For now, all focus remains on Pennsylvania which is crucial to both campaigns but much more to Trump’s chances for re-election as the loss of Michigan, Wisconsin, and Pennsylvania would assure him of loss of the Presidency. The races in Wisconsin and Michigan appear to be outside of the margin of error and favor Biden, but of course, anything can happen on election day and political pundits are far less certain than investors that we could see a clear winner tonight.

One key factor that is impossible to model is turnout. By all measures, turnout has been massive this election cycle with pollsters predicting that fully up 65% of the populace may vote – the highest percentage since the start of the last century. If the turnout projection proves true the outcome should favor Biden as the larger voting pool would more closely resemble the general polls which favor the Vice President by 7%-9%. One possible surprise could be a strong showing in American South with Texas and Georgia possibly shifting to vote blue. In fact, one of the most intriguing electoral map projections suggests that Pennsylvania may remain red but North Carolina, Georgia, and possibly Texas shift blue which would be a tectonic realignment of regional voting preferences.

At present, it appears that markets are modeling clear party lines wins with either Trump and Senate winning for the GOP or Biden completing the full Blue Wave sweep. Few are considering the very unpleasant implications of a split government with Biden winning the Presidency and the Senate remaining red. Under such conditions, there is very little chance that any meaningful legislation will pass, and the prospect of stimulus will be far less pronounced which likely to lead to lower equity prices as investors begin to realize that fiscal support won’t be coming.

For now, however, markets remain well bid awaiting the results of the most important election in recent memory.

Dollar Down, Futures Head Higher On Election Day
 

Related Articles

Al Brooks
EUR/USD: Dip Likely? By Al Brooks - Oct 15, 2021 1

Yesterday was a doji bar with a big tail on top. So far, today is a second consecutive doji, forming a potential micro double top. The bears hope it is the second high in a double...

InstaForex Group
EUR/USD: Correction Continues By InstaForex Group - Oct 15, 2021

The US PPI results have halted a frenzy triggered by the inflation report. Producer prices in the United States increased to 8.6% from 8.3% and above market forecasts of 8.5%....

Dollar Down, Futures Head Higher On Election Day

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
or
Sign up with Email