The AUD/USD opens at 0.7182 and the NZD/USD opens at 0.6691.
November 5, 2020 — 2 min read
Who needs The Bachelor?
The US election had all the excitement, with the lead swinging multiple times. Initially Biden was looking strong, and risk performed well on the back of that. However Trump stormed back, though the surprising thing was risk didn’t even sell back off that much. Without getting too detailed into the Electoral College system; two key states were Wisconsin and Michigan. Trump was ahead in these, with Biden only tracking at 44%, however with the mail-in votes counted, it is now looking like Biden will take both. It does vary around the country, but definitely in these two states, mail-in votes skewed hard toward the Democrats. Currently Biden is looking like he may well have it. However, the Republicans look like they have the senate, and Trump is planning to send in the lawyers, so we may well not have a hard decision, or rather a graceful concession speech for quite some time.
How will the market react? For now it appears to be risk-on on a Biden victory. However, there is no blue wave, so eventually the market is going to have to think what that will mean for stimulus, and if indeed there is a smooth transfer of power. The more both of these drag, the more it will weigh on the AUD and NZD, so things are by no means clear cut. Trump’s team has just filed a lawsuit to stop the counting of votes in Michigan - good to see democracy at work…
Global equity markets have rallied strongly - Dow +2.3%, S&P 500 +2.9%, FTSE +1.7%, DAX +2.0%, CAC +2.4%, Nikkei +1.7%, Shanghai +0.2%.
Gold prices are up 0.7% to USD$1,892 an ounce and WTI Crude Oil prices are also up 6.2% to US$36.5 per barrel.