By Tom Westbrook
SINGAPORE (Reuters) – Stock markets moved sideways and an uneasy calm settled over currencies and bonds as investors waited for the United States to elect a new leader. Polls showed the battle was on a razor’s edge.
Oil posted sharp gains due to delays in producers’ plans to increase production, leaving Brent crude futures at $75.08 a barrel after rising 3% on Monday.
MSCI’s broadest index of Asia-Pacific shares outside Japan was flat. Tokyo’s Nikkei returned from vacation and rose 1.3% in morning trading.
S&P 500 futures traded 0.1% higher.
The dollar, which had eased overnight as traders made final adjustments to their positions, bought 152.35 yen and traded at $1.0875 per euro.
“They have priced what they think is priceable and that is that,” said Westpac strategist Imre Speizer, adding that a clear win for Republican Donald Trump would lift the dollar, while a win for Democrat Kamala Harris would send it slightly lower Push. .
Election Day ends a bitter campaign rocked by assassination attempts on Trump and President Joe Biden’s withdrawal in favor of Harris, with polls showing the candidates nearly tied.
Markets are tense over how Trump’s protectionist trade policies in particular could fuel inflation and hit exports in the world’s largest consumer market, with bonds and the dollar expected to rise on the election results.
“Ultimately, the American elections come down to this: whether the American electorate wants to vote for continuity of economic policy, institutional stability and liberal democracy (Harris) or for radical trade policies, a further retreat from globalization and a strong democracy (Trump ),” JP Morgan Analysts wrote in a note. “In short: a vote for stability or change.”
ADJUSTABLE
China is seen as one of the front lines of tariff risk and the currency in particular is trading on tension, with implied volatility against the dollar at record highs.
The yuan hovered at 7.1065 per dollar, while broader currency markets remained steady. Traders were keeping an eye on an interest rate decision from the Reserve Bank of Australia, expected at 0330 GMT, although no policy change is expected and most remain on the sidelines to act quickly on the election results.
The Australian dollar remained at $0.6590. [AUD/]
“It’s just that if Harris wins, we’ll be happy to sell dollar/yen and buy AUDUSD,” currency strategists at Citi said. “If Trump wins, we will happily buy USD against EUR, SEK and NOK.”
The government bond markets, which had also priced in a US interest rate cut on Thursday, held steady in Asia with US ten-year yields at 4.30%.
