Yes, it's STILL going on.
Snapshot of how things stand.
Biden's closing the gap in Pennsylvania & Georgia.
We may see a result declared today. 🤞
Trump's campaign are filing lawsuits and losing, and the drama is bound to continue for a while yet.
It's pure pantomime, and legal action is highly unlikely to succeed.
As far as the markets are concerned, a Biden win with republicans maintaining the senate majority is the 'Goldilocks' outcome.
That seems most likely, but the senate election is still very close, and the possibility of a two-seat runoff in Georgia (in January) deciding the senate majority is something to keep an eye on.
In accordance with Georgia law, the winner of any statewide election must earn at least 50% of the vote, or the contest heads to a runoff, which for this particular cycle will occur on January 5.
If this happened, democrats could theoretically win both seats in January and gain the majority (which would spur concerns about greater regulation & higher taxes).
Overnight, Asian indices (excl. China) were in pretty good shape.
Maybe it's the news that China are going to fake a lower growth rate than they used to?
Elsewhere, risk is looking a little subdued.
Nasdaq futures are down by 1% overnight (still up over 8% on the week), and oil is drifting lower too.
Yesterday's Federal Reserve meeting can be summed up very briefly.
“Right now, we think this very large effective program is providing the right amount of support for the markets,” Powell said. “And so it continues.”
The dollar took a real beating yesterday.
An abundance of articles about the death of the dollar & new reserve currencies have been published in 2020.
At some point the dollar will rally and articles about the dollar retaining its crown can be rolled out again.
That's just how the media works.
Central banks and governments work differently.
They worship at the altar of stability.
The pace of change in exchange rates (especially vs the dollar) is also a concern.
So it was yesterday. The yen strengthened sharply, prompting Prime Minister Suga to speak out.
Japanese Prime Minister Yoshihide Suga on Friday vowed to work closely with overseas authorities to keep currency moves stable, signalling his readiness to respond to any yen spike that threatens to derail the country’s fragile economic recovery.
“Exchange-rate stability is extremely important,” Suga told parliament, when asked how Japan will respond to any changes a new U.S. administration could make to its dollar policy.
“We will respond appropriately on markets, while keeping in close contact with overseas authorities,” Suga said. He declined to comment on specific currency levels or moves.
Suga’s remarks followed those by Bank of Japan Governor Haruhiko Kuroda, who said on Wednesday the central bank will work closely with financial authorities to help keep currency moves stable.
The dollar fell to 103.59 yen in Asia on Friday, close to an eight-month low, as a contentious U.S. presidential election diminished hopes for large stimulus to support the economy any time soon.
A yen spike has historically been a trigger for monetary easing by the BOJ and jawboning from authorities keen to prevent yen rises from hurting Japan’s export-reliant economy.
Many analysts see 100 yen to the dollar as Japan’s line-in-the-sand. But the hurdle for intervening in the currency market is high, as Tokyo is unlikely to win consent from other countries also suffering from the hit to their economies from the coronavirus pandemic, analysts say.
Some market players expect the BOJ to deepen negative interest rates if the yen spikes, though that option is also controversial given the strain years of ultra-low rates are inflicting on financial institutions’ profits.
Looking ahead, NFP would usually be the calendar highlight but may be overshadowed by election events today.
Bad figures could be a perverse positive for the markets, as it keeps the pressure on policymakers to pass further stimulus measures.
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