Donald Trump is much closer in major battleground states than polls had predicted
Extending the winning streak from the start of the week, Wall Street stocks jumped overnight as investors hoped a contested result of the presidential election would be avoided, with the Dow having its best performance since July. Before yesterday’s vote, former Vice President Joe Biden held a lead in national polling over President Donald Trump. The Dow finished 2.1% higher, the S&P 500 closed up 1.8% while the Nasdaq Composite ended up 1.9%.
Asian stocks were mixed on Wednesday, as investors cautiously weighed the results of the U.S. presidential election, with market players appearing to be in wait-and-see mode. As such, Japan’s Nikkei 225 rose 1.7% and South Korea’s Kospi advanced 0.6%. Hong Kong’s Hang Seng index gained 0.18%, while the Shanghai Composite inched up 0.2%. Australia’s S&P/ASX 200 was flat.
In Europe, stocks opened lower as investor sentiment turned sour amid signs Donald Trump was much closer in major battleground states than polls had predicted. Early in the session, the pan-European STOXX 600 index fell 1.2%, while the German DAX shed 1.8% and UK’s FTSE 100 gave up 1.2%. New York’s S&P 500 futures also slid after the initial ascent.
As the risk-off tone has reemerged, the greenback gained across the board as traders bet on Trump’s victory. EURUSD was rejected from the 1.1770 area and briefly slipped to late-July lows around the 1.16 handle. Since then, the pair managed to recover to 1.1675 and regained the 100-DMA while further direction will depend on fresh news surrounding the US election.
Elsewhere, gold prices came under pressure amid a stronger dollar demand. As a result, the precious metal was once again rejected from the levels above $1,900 and got back below the 20-DMA. If Trump wins, the dollar will extend the rally and thus push the bullion lower. In this scenario, the local lows around $1,860 could be derailed.