Buyers retreated into the secure haven of the greenback and US treasury bonds as monetary markets had been rattled by uncertainty over whether or not Donald Trump or Joe Biden had received the race for the White Home.
The greenback rose by 1% in opposition to a basket of world currencies and there was sturdy shopping for of US authorities bonds because the temper turned cautious.
With the prospect of days of wrangling earlier than a final result and the close to certainty of continued gridlock in Congress, London’s FTSE had a risky opening, initially with hefty losses earlier than regaining the misplaced floor.
Within the US, early indications had been that Wall Avenue’s Dow Jones Industrial Common would begin the day modestly decrease. Share costs had been boosted by the prospect of a “blue wave”, during which a Biden victory accompanied by the Democrats seizing management of the Senate and the Home of Representatives would pave the way in which for a large new stimulus bundle.
That end result didn’t materialise because the Republicans carried out extra strongly than opinion polls and the monetary markets had predicted, holding on to the Senate and leaving the battle for the presidency hanging within the steadiness.
Chris Turner, the worldwide head of markets on the banking group ING, mentioned: “One of many few issues clear to this point is that we aren’t going to see a Democrat landslide win as polls had instructed. That has wrongfooted a overseas trade market which was positioned for some readability.”
Stéphane Monier, the chief funding officer on the non-public financial institution Lombard Odier, mentioned: “It very a lot seems that whoever wins the White Home, we face a divided Congress. This has far-reaching implications for markets, largely as a result of it signifies that any sort of pandemic restoration bundle continues to be powerful to approve.”