By Deepta Bolaky
 @DeeptaGOMarkets

Equity Markets

The spotlight remained on the US Presidential election day. Despite an unprecedented health and economic crisis, the 2020 election reflects a deeply polarised nation similar to the 2016 election results. As of writing, there are a few key battleground states yet to be claimed in this tight election. Many are calling the key state of Michigan for Joe Biden but with many mail ballots yet to be counted, it is too early to call. However, winning Michigan will bring Joe Biden closer to victory. 

The Trump campaign has now launched legal actions against Pennsylvania and Michigan and requested a recount in Wisconsin. It could be days before the election results are announced, but one thing for sure, the hopes of a blue wave “clean sweep” in the Senate may be unlikely and the US may face the status quo on the policy front.

Global equities rallied on Wednesday at the uncertain outcome and fears of a contested election.

Source: Bloomberg

In the US markets, attention was on the stimulus package and the election outcome. It is another tight election which cast doubts on the size of the government relief package. The election outcome might plunge the US economy into another period of great uncertainty which prompted traders to pile into Treasuries.

Another day of gains on Wall Street where all major US equity indices rallied above 1% or more on Wednesday.

• The Dow Jones Industrial Average added 368 points or 1.3% to 27,848.
• S&P 500 rose by 74 points or 2.2% to 3,343. The Index had its best first-day gain ever after the presidential vote. 

• Nasdaq Composite added 430 points or 3.9% to 11,591 lifted by the outperformance of the big tech giants like Facebook, Alphabet, Amazon, Microsoft and Apple.

Currency Markets 

In the FX space, major currencies were stronger against the US dollar following the rally in the equity markets. Given the tight election results and the prospects of a contested election, major pairs remained in familiar levels. 

Source: Bloomberg

The British Pound emerged as the worst-performing G10 currencies against the US dollar dragged by negative Brexit headlines and speculations about the BoE swirling about negative interest rates. The GBPUSD pair dropped from a high of 1.31 level to a low around the 1.29 level. 

Source: GIT MT4

Commodities

Crude oil prices posted modest gains on the back of the improvement in risk sentiment and bullish API and EIA reports despite the ongoing uncertainty on the demand side. EIA’s crude oil stocks change came in at -7.998M, below expectations (0.89M) on October 30. As of writing, WTI Crude oil (Nymex) and Brent Crude (ICE) were trading at around $38.96 and $41.23 respectively. 

Gold

In a volatile trading session, the precious metal held above the $1,900 level lifted by a weaker US dollar. As of writing, the XAUUSD pair is trading around $1,904. The timing and size of the US stimulus package remain the focal point for gold traders. 

Source: GO MT4

By Deepta Bolaky
 @DeeptaGOMarkets

Key upcoming events

• Imports, Exports, Trade Balance (Australia)
• Factory Orders (Germany)
• Retail Sales (Eurozone)
• Bank of England Monetary Policy Report, BoE MPC Vote, Monetary Policy Summary, BoE Asset Purchase Facility, Bank of England Minutes, BoE Interest Rate Decision, and Governor Bailey Speech (UK)
• Jobless Claims, Nonfarm Productivity, Unit Labor Costs, Fed Interest Rate Decision, Fed’s Monetary Policy Statement and FOMC Press Conference (US)

Friday, 06 November 2020  Indicative Index Dividends Dividends are in Points
ASX200	WS30	US500	US2000	NDX100	CAC40	STOXX50
0.213	1.349	0.45	0.092	2.705	0	0
ESP35	ITA40	FTSE100	DAX30	HK50	JP225	INDIA50
0	0	0	0	0	0	0

Disclaimer:  The articles are from GO Markets analysts,  based on their independent analysis or personal experiences. Views or opinions or trading styles expressed are of their own;  should not be taken as either representative of or shared by GO Markets.  Advice (if any),  are of a ‘general’ nature and not based on your personal objectives, financial situation or needs.  You should therefore consider how appropriate the advice (if any) is to your objectives, financial situation and needs, before acting on the advice.  If the advice relates to acquiring a particular financial product, you should obtain and consider the Product Disclosure Statement (PDS) and Financial Services Guide (FSG) for that product before making any decisions.

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