News & Analysis at your fingertips.

We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site.

0

Notifications

Notifications below are based on filters which can be adjusted via Economic and Webinar Calendar pages.

Live Webinar

Live Webinar Events

0

Economic Calendar

Economic Calendar Events

0
Free Trading Guides
Subscribe
Please try again
EUR/USD
Bearish
Oil - US Crude
Mixed
Wall Street
Mixed
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
Gold
Mixed
GBP/USD
Bearish
USD/JPY
Bullish
More View more
Real Time News
  • The US Dollar (via the DXY Index) has hit fresh lows amid the latest headlines around US fiscal stimulus talks. Get your market update from @CVecchioFX here:https://t.co/yDXdpZIcxq https://t.co/GlSrdNjEeZ
  • Commodities Update: As of 03:00, these are your best and worst performers based on the London trading schedule: Gold: 0.22% Oil - US Crude: 0.14% Silver: -0.21% View the performance of all markets via https://www.dailyfx.com/forex-rates#commodities https://t.co/WR0TUUbAnB
  • Forex Update: As of 03:00, these are your best and worst performers based on the London trading schedule: 🇬🇧GBP: 0.12% 🇨🇭CHF: 0.09% 🇪🇺EUR: 0.08% 🇨🇦CAD: -0.02% 🇯🇵JPY: -0.03% 🇳🇿NZD: -0.03% View the performance of all markets via https://www.dailyfx.com/forex-rates#currencies https://t.co/mgBg1eesms
  • IG Client Sentiment Update: Our data shows the vast majority of traders in Ripple are long at 94.68%, while traders in EUR/USD are at opposite extremes with 73.16%. See the summary chart below and full details and charts on DailyFX: https://www.dailyfx.com/sentiment https://t.co/ZyugXjE2ov
  • The British Pound is eyeing a push to fresh yearly highs against the US Dollar. However, various technical setups suggest GBP could lose ground to JPY, EUR and NZD in the near term. Get your $GBP market update from @DanielGMoss here:https://t.co/NSUnZnxAdi https://t.co/Ounuyh073c
  • The Dow Jones index appears to be ranging between 22,920 to 30,000 over the past few weeks. The overall trend remains bullish biased, but its upward momentum is fading as Bollinger Band width narrows. A decisive break above 30,000 resistance may open the door for further upside. https://t.co/pvWoVloiZV
  • Update on #Cryptocurrencies #BITCOIN -0.46% #BITCOINCASH -0.24% #ETHEREUM -0.78% #RIPPLE +0.83% #LITECOIN +0.77%
  • Wall Street Futures Update: Dow Jones (-0.110%) S&P 500 (-0.082%) Nasdaq 100 (+0.086%) [delayed] -BBG
  • 🇨🇳 Caixin Services PMI (NOV) Actual: 57.8 Previous: 56.8 https://www.dailyfx.com/economic-calendar#2020-12-03
  • BoJ's Suzuki: - Flexibility and sustainability in policy is vital - Supporting growth strategy in the long term is vital - Must support labor market - BBG $USDJPY
S&P 500 Futures Seesaw on Presidential Election Uncertainty. Florida Update

S&P 500 Futures Seesaw on Presidential Election Uncertainty. Florida Update

2020-11-04 04:00:00
Dimitri Zabelin, Analyst
Share:

2020 Election, S&P 500 Analysis, Presidential Polls - Talking Points

  • Markets initially rallied off of “blue wave” hopes – AUD, NZD, gold, oil surged, USD plunged
  • However, a tight race in Florida and unexpected rise in votes for Trump reversed this dynamic
  • Betting odds reflecting similar spread to 2016 election. What could happen if Trump wins again?
Advertisement

US PRESIDENTIAL ELECTION

Markets initially expressed a risk-on tilt with polling data that at first showed a strong lead for former Vice President and Democratic nominee Joe Biden. The haven-linked US Dollar fell along with the anti-risk Japanese Yen while gold prices, crude oil, the Australian and New Zealand Dollars all rose. I wrote about this as a possible market dynamic in a report two hours before it manifested here.

Chart Showing USD, JPY Indices, Gold, S&P 500 Futures Crude Oil

Chart showing crude oil prices, xau/usd, us dollar, japanese yen

Source: TradingView

However, as the race for Florida tightened, we saw market sentiment reverse as more focus was placed on a key battleground state that holds the third-most electoral votes. Every candidate that won the presidency in each election since 1992 conquered Florida. Market sentiment further deteriorated after polls began to show Trump leading in Pennsylvania.

Forex for Beginners
Forex for Beginners
Recommended by Dimitri Zabelin
Forex for Beginners
Get My Guide

Chart Showing USD, JPY Indices, Gold, S&P 500 Futures Crude Oil

S&P 500 Futures Seesaw on Presidential Election Uncertainty. Florida Update

Source: TradingView

As I had written before, the surge in volatility and swift comeback of the US Dollar comes in part due to markets being thrown off by the unexpected spike in Mr. Trump’s popularity. This is because Democrats as a group are more likely to vote by mail than Republicans who are statistically more inclined to vote in person. Investors’ strong reliance on polling agencies may therefore have given them a false sense of certainty.

In tandem with these developments, betting markets initially showed spreads indicating a strong underlying confidence of a Biden win, but now these are strongly tilting towards Trump. Some spreads are now as high if not higher than they were in 2016 when he ran against then-Democratic nominee and Secretary of State Hilary Clinton.

Building Confidence in Trading
Building Confidence in Trading
Recommended by Dimitri Zabelin
Don’t give into despair, make a game plan
Get My Guide

Looking ahead, if polls continue to indicate a growing likelihood that Mr. Trump will win the election, then the aforementioned risk-off dynamic may be magnified. Having said that, Mr. Biden is expected to win California which carries the most electoral votes out of any state. Due to the fluidity of the situation, to give any immediate forecasts now on polling data may be quickly outdated.

One thing traders can expect though for now is political volatility jumpstarting violent oscillations in high-beta assets like AUD, NZD, oil and equity futures. To learn more about why the implications of a Trump presidency are having a risk-off tilt in market mood and the opposite for Biden, see our landing page on how to trade the election with a focus on policies markets are concerned about being implemented.

--- Written by Dimitri Zabelin, Currency Analyst for DailyFX.com

To contact Dimitri, use the comments section below or@ZabelinDimitrion Twitter

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

DISCLOSURES