The attention of the whole world will shift to the US next week as the country elects its 45th President. The markets remain in a jittery mode with the outcome of the polls likely to swing in either direction in a short trading week. US and Canadian markets are closed on Friday. Many still project that the Democratic candidate, Hillary Clinton will most likely emerge Democratic candidate, Hillary Clinton will most likely emerge .
Besides the presidential elections, on the economic front, China’s inflation and trade data, second tier regional data from the eurozone and the RBNZ interest rate decision makes up for the economic calendar this week.
Risk off appetite to prevail on election uncertainty
Polls are set to open on Tuesday, November 8th and the results of the elections are expected to be announced on November 9th. A Clinton victory, projected by many might not be as straight forward. In the third presidential debate, Trump said that he might not accept a loss.
Speaking to his supporters later, Trump said, “I would also reserve my right to contest or file a legal challenge in the case of a questionable result. I will follow and abide by all the rules and traditions of all of the many candidates who came before me, always.â€
While a Clinton administration is expected to see the current policies being maintained, a Trump victory is likely to see a lot more uncertainty, especially on domestic and foreign policy on issues such as immigration which has been one of the major sticking points during this presidential campaign.
Last week, the US equity markets were already in a risk-averse mood, losing 2.9% since October 25th. On Friday, the S&P 500 closed at 2085, down 1.94% for the week. Erik Davidson, CIO at Wells Fargo Private Bank said, “There’s obviously a lot of angst going into the election. The lessons of the Brexit vote are still pretty recent, so I think people are a little cautious about what the markets have priced in and what could happen.â€
