Clinton vs Trump Outcome to Shape Market-Wide Sentiment
08 Nov 2016 07:13, GMTTalking Points:
- Commodity FX lower as Yen gains, retracing yesterday’s price action
- Quiet consolidation likely across markets before US election outcome
- Clinton/Trump dichotomy to be reflected in risk on/off trade dynamics
The Australian, Canadian and New Zealand Dollars pulled back while the Yen edged cautiously higher in moves that appeared corrective following yesterday’s session. Commodity bloc FX outperformed while the anti-risk Japanese unit plunged as markets cheered after the FBI affirmed that Hillary Clinton did not commit a crime in the handling of emails while serving as Secretary of State.
Markets dislike uncertainty most of all. With that in mind, it seems understandable to see risk sentiment improving along with the probability of a Clinton victory. The former First Lady and New York Senator is the “status quo” candidate. Investors seem fairly comfortable betting on the direction of US policy and allocating assets accordingly with her in the White House.
Clinton’s opponent Donald Trump is anything but the conventional option so pricing risk in the event of his victory is inherently trickier. With that in mind, it makes sense that protective traders reduced exposure to more speculative assets as polls narrowed after the FBI opted to probe Ms Clinton anew last week only to reverse course when the investigation came up empty.
These price gyrations underscore the markets’ sensitivity to the US presidential election outcome as voters head for the polls in the hours ahead. A batch of second-tier European economic data and a bit of Fed-speak will probably fade into the background as traders wait for the vote’s result before committing to a firm directional bias. In the meantime, quiet consolidation is likely to persist.
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Asia Session
GMT | CCY | EVENT | ACT | EXP | PREV |
---|---|---|---|---|---|
21:00 | NZD | ANZ Truckometer Heavy (MoM) (OCT) | -0.2% | - | -2.4% |
22:30 | AUD | ANZ Roy Morgan Weekly Consumer Conf | 117.8 | - | 114.1 |
23:50 | JPY | Official Reserve Assets (OCT) | $1242.8b | - | $1260.1b |
0:01 | GBP | BRC Sales Like-For-Like (YoY) (OCT) | 1.7% | 0.6% | 0.4% |
0:30 | AUD | NAB Business Conditions (OCT) | 6 | - | 8 |
0:30 | AUD | NAB Business Confidence (OCT) | 4 | - | 6 |
2:33 | CNY | Exports (CNY) (YoY) (OCT) | -3.2% | -0.8% | -5.6% |
2:33 | CNY | Imports(CNY) (YoY) (OCT) | 3.2% | 5.0% | 2.2% |
2:33 | CNY | Trade Balance (CNY) (OCT) | 325.25b | 366.61b | 278.35b |
2:40 | CNY | Trade Balance ($) (OCT) | $49.06b | $51.70b | $41.99b |
2:40 | CNY | Exports ($) (YoY) (OCT) | -7.3% | -6.0% | -10.0% |
2:40 | CNY | Imports ($) (YoY) (OCT) | -1.4% | -1.0% | -1.9% |
5:00 | JPY | Leading Index CI (SEP P) | 100.5 | 100.5 | 100.9 |
5:00 | JPY | Coincident Index (SEP P) | 112.1 | 112.1 | 112.0 |
European Session
GMT | CCY | EVENT | EXP | PREV | IMPACT |
---|---|---|---|---|---|
6:45 | CHF | Unemployment Rate (OCT) | 3.2% | 3.2% | Medium |
6:45 | CHF | Unemployment Rate SA (OCT) | 3.3% | 3.3% | Medium |
7:00 | EUR | Germany Industrial Production (MoM) (SEP) | -0.5% | 2.5% | Medium |
7:00 | EUR | Germany Industrial Production (YoY) (SEP) | 2.0% | 1.9% | Medium |
7:00 | EUR | Germany Trade Balance (SEP) | 22.4b | 20.1b | Medium |
7:00 | EUR | Germany Current Account Balance (SEP) | 24.5b | 17.9b | Low |
7:00 | EUR | Germany Exports SA (MoM) (SEP) | -0.8% | 3.4% | Low |
7:00 | EUR | Germany Imports SA (MoM) (SEP) | -0.2% | 1.9% | Low |
9:30 | GBP | Industrial Production (MoM) (SEP) | 0.0% | -0.4% | Medium |
9:30 | GBP | Industrial Production (YoY) (SEP) | 0.8% | 0.7% | Medium |
9:30 | GBP | Manufacturing Production (MoM) (SEP) | 0.4% | 0.2% | Medium |
9:30 | GBP | Manufacturing Production (YoY) (SEP) | -0.1% | 0.5% | Medium |
Critical Levels
CCY | Supp 3 | Supp 2 | Supp 1 | Pivot Point | Res 1 | Res 2 | Res 3 |
---|---|---|---|---|---|---|---|
EUR/USD | 1.0837 | 1.0954 | 1.0998 | 1.1071 | 1.1115 | 1.1188 | 1.1305 |
GBP/USD | 1.2136 | 1.2285 | 1.2341 | 1.2434 | 1.2490 | 1.2583 | 1.2732 |
--- Written by Ilya Spivak, Currency Strategist for DailyFX.com
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