The NYT projection has Republicans with 194 seats and Democrats with 173 seats at the moment. And among the key ‚competitive‘ districts here, there are still 45 left to officially report. That said, some of the votes are likely to be called imminently. So, let’s take a look at some important details that have surfaced so far.

Among the more tightly ‚competitive‘ districts, Iowa 3 has been called for the Republicans while New Mexico 2 and New York 19 has been called for Democrats. Those should not be listed as any upsets, if you cross check that with this piece here (h/t @ admcrlsn):

The way I’d read sentiment on the House race now is to use the NYT list of ‚competitive‘ districts identified for each party to win. And then to cross reference that individually to the tilt/lean bias in the above image to get a better sense of any „upsets“.

Taking the above into consideration, the standout result at the moment is Pennsylvania 8. It is supposed to be slightly Democratic leaning but Robert Bresnahan (R) is leading by 2 points against incumbent Matt Cartwright (D) with >95% of votes in. Nebraska 2 is the other one also showing a similar story, with Don Bacon (R) leading by 1.8 points over Tony Vargas (D) also with >95% of votes in.

In the supposed toss up category, Iowa 1 is one spot to watch with Mariannette Miller-Meeks (R) leading by just 0.1 points over Christina Bohannan (D) with >95% of votes in.

The rest are still seeing lacking in vote count to really draw too much conclusions for the time being. But besides the three highlighted i.e. Pennsylvania 8, Nebraska 2, Iowa 1, everything else is playing out as it should.

And if it stays that way, Republicans might just pip it in the end especially if they can secure the toss ups. But for now, it’s still a little premature to be calling any favourites yet.

This article was written by Justin Low at www.forexlive.com.

Fundamental
Overview

The US Dollar started the
week on the backfoot as the odds of a Harris victory jumped higher leading to a
pullback in the Trump’s trades.

Everything hinges on the US
election now with a red sweep seen as the most bullish scenario for the
greenback, while a blue sweep as the most bearish.

The price action will
likely be choppy until we start to get a better sense of who’s going to win, so
the best strategy would be to wait for the results, because the trend that will
be set will likely last for months anyway.

On the AUD side, the RBA kept the cash rate unchanged today as expected
but lowered growth and inflation forecasts slightly. This is just another
subtle change towards a more dovish stance, although the market’s focus is now
elsewhere.

AUDUSD
Technical Analysis – Daily Timeframe

On the daily chart, we can
see that AUDUSD pulled back to the key 0.6622 level amid a weaker US Dollar.
This is where we can expect the sellers to step in with a defined risk above
the level to position for a drop into new lows. The buyers, on the other hand,
will want to see the price breaking higher to increase the bullish bets into
the 0.68 handle.

AUDUSD Technical
Analysis – 4 hour Timeframe

On the 4 hour chart, we can
see that the price broke above the downward trendline that was defining the bearish
momentum on this timeframe. This might be a signal of a deeper pullback to
follow. There’s not much else we can add here as the sellers will lean on the
0.6722 level to position for new lows, while the buyers will look for a break
higher to target new highs.

AUDUSD Technical
Analysis – 1 hour Timeframe

On the 1 hour chart, we can
see that we now have a minor upward trendline defining the current bullish
momentum on this timeframe. The buyers will likely lean on it to position for
the break of the 0.6722 level, while the sellers will look for a break lower to
increase the bearish bets into new lows. The red lines define the average daily range for today.

Upcoming
Catalysts

Today is the US Presidential Election Day but we will also get the US ISM
Services PMI report. On Thursday, we have the US Jobless Claims and the FOMC
Policy Decision. On Friday, we conclude the week with the US University of
Michigan Consumer Sentiment report.

This article was written by Giuseppe Dellamotta at www.forexlive.com.

Fundamental
Overview

The US Dollar started the
week on the backfoot as the odds of a Harris victory jumped higher leading to a
pullback in the Trump’s trades.

Everything hinges on the US
election now with a red sweep seen as the most bullish scenario for the
greenback, while a blue sweep as the most bearish.

The price action will
likely be choppy until we start to get a better sense of who’s going to win, so
the best strategy would be to wait for the results, because the trend that will
be set will likely last for months anyway.

USDCAD
Technical Analysis – Daily Timeframe

On the daily chart, we can
see that USDCAD pulled back from the 2-year highs amid some greenback weakness.
The buyers will want to see the price breaking above the high to increase the
bullish bets into new highs, while the sellers will look for a break below the
1.3860 level to start looking for more downside.

USDCAD Technical
Analysis – 4 hour Timeframe

On the 4 hour chart, we can
see that the price broke below the minor upward trendline that was defining the bullish momentum
on this timeframe. These are generally signals of weakening momentum, so we
might see a deeper pullback. The buyers will likely step in around the 1.3860
level, while the sellers will look for a break lower to increase the bearish
bets into the 1.3785 level next.

USDCAD Technical
Analysis – 1 hour Timeframe

On the 1 hour chart, we can
see more clearly the rangebound price action of the last few days as the market
awaits the US election result. There’s not much else we can add here as the
election noise will likely lead to a choppy price action until we get the
results. The red lines define the average daily range for today.

Upcoming
Catalysts

Today is the US Presidential Election Day but we will also get the US ISM
Services PMI report. On Thursday, we have the US Jobless Claims and the FOMC
Policy Decision. On Friday, we conclude the week with the Canadian Labour Market
report and the US University of Michigan Consumer Sentiment report.

This article was written by Giuseppe Dellamotta at www.forexlive.com.

The U.S. presidential election
draws near, and investors are on high alert
as the outcomes of Kamala Harris’s and Donald Trump’s contrasting economic
policies could have significant ramifications for the financial markets. With
key decisions looming around tax rates, regulation, energy policy, and trade,
the potential for market volatility increases depending on who gets into the
White House and what the new balance of power in the U.S. Congress will be. In
this article, Octa Broker’s financial analyst, Kar Yong Ang, breaks down the
candidates‘ divergent economic visions and outlines possible scenarios for
market reactions post-election, offering critical insights for traders to
navigate the uncertain financial landscape ahead.

With less than a day to go until
the U.S. presidential election, investors and traders are bracing for the
potential impact on the financial markets. Although both candidates (Kamala
Harris and Donald Trump) proclaim to pursue similar goals–––notably, creating
jobs and boosting the U.S. manufacturing base–––they offer very different
approaches to economic policy. Therefore, financial markets will almost
certainly respond differently depending on who ultimately gets into the White
House. Furthermore, it is important to factor in the possible changes in the
arrangement of power on Capitol Hill, as 33 out of 100 senators and all 435
delegates in the House of Representatives will also seek re-election this
November.

At Octa Broker, we decided to offer
our view about what to expect from the upcoming elections and what could be the
possible impact on the financial markets in general and on gold and the U.S.
dollar in particular. Before we lay out the possible scenarios, let’s first
briefly recap the economic policy visions of Vice President Kamala Harris, the
Democratic Party candidate, and of former President Donald Trump, the
Republican Party nominee, and underline their key differences. Please note that
this article will focus specifically on the candidates‘ economic policies that
are expected to have the most impact on the financial markets and affect an
average trader. Thus, the general focus is on tax policy, regulation, energy
policy, foreign policy, and tariffs. The article will not delve into the
details of other policies, such as abortion rights, immigration, housing, and
healthcare policy.

Table
1: Comparing the Candidates

‘When
you wake up on 6 November to check the results of the U.S. presidential
elections, there are two things to keep in mind’, argues Kar Yong Ang, a financial
market analyst at Octa Broker. ‘Firstly,
it is vital to realise just how decisive the victory of either of the
candidates is. Secondly, it is very important to ascertain the new composition
of the Legislative Branch‘. Indeed, if either Harris or Trump wins the
national popular vote with only a slim majority or the Electoral College
produces mixed and uncertain results, the investors may get nervous, and market
volatility will rise. ‘Contesting
results are not good for the markets, as they may trigger disputes among the
parties and delay important economic decisions in the best-case scenario and
lead to social unrest and violence in the worst case’, Karr says.

The composition of the House and
the Senate is equally important as they will largely determine the ultimate
balance of power and the direction of the legislation. According to ABC News
simulation, Republicans win control of the Senate 88 times out of 100[1],
meaning that it is highly unlikely that the Democratic Party can manage to take
out the upper chamber of the U.S. Congress. When it comes to the House of
Representatives, however, the chances are 50/50.
Thus, it seems reasonable to infer that only four potential scenarios exist in
this election (see the table below).

Table
2: Possible Scenarios and the Dollar Impact

Scenarios
1 and 2

Scenarios 1 and 2 assume that
Kamala Harris becomes the next President of the United States, but her
executive power is severely or partly limited. In case Republicans capture both
the House and the Senate, Harris’s policy initiatives will be blocked or substantially
amended. On balance, a Harris presidency facing a hostile Congress would bring
about a politically unstable and unpredictable environment, which investors
despise. As a result, the economy will underperform, stocks will decline, and
the dollar will weaken.

‘A
government paralysed by dysfunction and gridlock is the worst-case scenario for
the U.S. economy in general and for the U.S. dollar in particular’, says Kar
Yong Ang, a financial market analyst at Octa Broker. ‘The probability of a protracted government shutdown is very high under
this scenario. U.S. stock market indices will certainly take a hit’.

Indeed, Harris’s progressive
initiatives on climate and the environment will be blocked, while fiscal and
economic policy will become a key point of contention, leading to a major
standoff over the budget. At the same time, Harris’s presidency might result in
less government spending, which will have a disinflationary impact, enabling
the Federal Reserve (Fed) to continue reducing interest rates. That, too,
however, will have a long-term bearish impact on the U.S. dollar.

In turn, the greenback’s weakness
may have a bullish impact on commodities, especially gold, as it will become
more affordable for holders of other currencies. Another bullish factor for
commodities in general and for gold, in particular, is that the conflict in
Eastern Europe will likely drag on under Harris, given that she has been more
in favour of supplying the weapons rather than pushing for a peace deal.

‘All
in all, I think Harris’s presidency will be met with a bearish reaction in U.S.
equity markets–––especially in the energy sector. Companies focusing on
renewables may perform better but still suffer in the long term as Harris will
struggle to push her environmental agenda. The U.S. dollar will almost
certainly sell off, while the euro and Chinese yuan will strengthen’, concludes
Kar Yong Ang.

Scenarios
3 and 4

Scenarios 3 and 4 assume that
Donald Trump becomes the next President of the United States, but his executive
power will either be partly limited by the Democratic House or, alternatively,
he manages to achieve a sweeping victory with the Republican Party taking full
control over both chambers of Congress. In this case, investors will likely
cheer (at least in the short term), as Trump promises to cut red tape and
reduce taxes. Stock indices will rally, and the dollar may strengthen. Still,
there will be long-term risks associated with Trump’s trade policy.

‘The
fears over U.S. debt sustainability will certainly rise under Trump’, says Kar
Yong Ang, a financial market analyst at Octa Broker. ‘He will extend as well as enlarge the tax cuts, essentially bringing
about a loose fiscal policy, which, in turn, will force the Fed to be hawkish’.
Indeed, a Republican sweep victory is the most bullish scenario for the
greenback in the midterm. Inflationary tax cuts will boost the economy and may
potentially force the Fed to stop its rate-cutting campaign, which will support
the U.S. dollar vs other currencies. However, the U.S.’s gigantic deficit will
likely keep expanding. Reuters estimates that Donald Trump’s tax cut plans
would add some $3.6 trillion to $6.6 trillion to federal deficits over a decade.

On the one hand, tax cuts may serve
as a catalyst for U.S. economic growth, which should support oil prices,
especially given that Trump is likely to enforce stricter sanctions against
Iran. On the other hand, U.S. crude oil and natural gas output may rise as the
Trump administration will likely support the companies engaged in fossil fuel
production.

Trade policy is not expected to be
Trump’s top priority, but he may still introduce new tariffs in 2025-2026.
First and foremost, this will negatively affect China and its currency, the
yuan. At the same time, Trump’s victory will be a major bullish factor for the
crypto industry in general and for digital currencies in particular. He made no
secret of his support for crypto and even advocated for the establishment of a
national Bitcoin reserve.

‘All
in all, I think Trump’s presidency will be met with a bullish reaction in U.S.
equity markets–––especially in the energy sector, and especially in case of a
sweeping victory. Companies with a focus on renewables will underperform,
bitcoin will rally, while the euro and the Chinese yuan will fall. However, the
market has already partly priced in Trump’s victory. Therefore, in a classic
‘buy the rumour, sell the news’ scenario, the asset prices I just mentioned may
actually drop immediately after the election, but will likely remain supported
in 2025’, concludes Kar Yong Ang.

About
Octa

Octa is an international broker that has been providing online trading
services worldwide since 2011. It offers commission-free access to financial
markets and a variety of services used by clients from 180 countries who have
opened more than 52 million trading accounts. To help its clients reach their
investment goals, Octa offers free educational webinars, articles, and
analytical tools.

The company is involved in a
comprehensive network of charitable and humanitarian initiatives, including the
improvement of educational infrastructure and short-notice relief projects
supporting local communities.

Since its foundation, Octa has won more
than 70 awards, including the ‘Best Forex Broker 2023’ award from
AllForexRating and the ‘Best Mobile Trading Platform 2024’ award from Global
Brand Magazine.

This article was written by FL Contributors at www.forexlive.com.

Fundamental
Overview

The US Dollar started the
week on the backfoot as the odds of a Harris victory jumped higher leading to a
pullback in the Trump’s trades.

Everything hinges on the US
election now with a red sweep seen as the most bullish scenario for the
greenback, while a blue sweep as the most bearish.

The price action will
likely be choppy until we start to get a better sense of who’s going to win, so
the best strategy would be to wait for the results, because the trend that will
be set will likely last for months anyway.

EURUSD Technical
Analysis – Daily Timeframe

On the daily chart, we can
see that EURUSD bounced off of the key swing level at 1.0777 as the buyers
stepped in with a defined risk below the level to position for a pullback into
the 1.10 handle. The sellers will want to see the price breaking below the
swing level to increase the bearish bets into the 1.06 handle next.

EURUSD Technical
Analysis – 4 hour Timeframe

On the 4 hour chart, we can
see that we have a minor upward trendline defining the current bullish momentum
on this timeframe. The buyers will likely lean on the trendline to keep
targeting new highs, while the sellers will look for a break lower to position
for the break below the key 1.0777 level.

EURUSD Technical
Analysis – 1 hour Timeframe

On the 1 hour chart, we can
see more clearly the recent price action with higher highs and higher lows
indicating a bullish trend. There’s not much else we can add here as the
election noise will likely lead to a choppy price action until we get the results.
The red lines define the average daily range for today.

Upcoming
Catalysts

Today is the US Presidential Election Day but we will also get the US ISM
Services PMI report. On Thursday, we have the US Jobless Claims and the FOMC
Policy Decision. On Friday, we conclude the week with the University of
Michigan Consumer Sentiment report.

This article was written by Giuseppe Dellamotta at www.forexlive.com.

• Prior 52.4
• Composite PMI 51.8 vs 51.7 prelim
• Prior 52.6

Services activity continues to see slowing momentum in October, with the weakest rise in business activity since November last year. Adding to that, employment conditions showed a fall for the first time this year. So, that is something that the BOE might want to take note of in terms of labour market developments moving forward. S&P Global notes that:

„October data signalled another slowdown in output
growth across the service sector as heightened business
uncertainty and concerns about the general UK economic
outlook had an adverse impact on demand conditions.

„The latest expansion of service sector activity was the
weakest since November 2023, while new business growth
slipped to a four-month low.
„The wait for clarity on government policy ahead of the
Autumn Budget was widely reported to have weighed on
business confidence and spending. Broader geopolitical
concerns and forthcoming US elections also added to a
sense of wait-and-see on business investment decisions
in October. At the same time, cost of living pressures
remained a constraint on household spending.

„With service providers grappling with softer new order
growth and less upbeat business activity expectations for
the year ahead, the latest survey pointed to a decline in
staffing numbers for the first time since December 2023.
A number of firms also noted budget constraints due to
elevated salary pressures.

„Higher wages resulted in another month of strong input
cost inflation across the service economy. The overall rate
of inflation edged up to a three-month high, but remained
much weaker than seen on average in the first half of
2024. Output charge inflation meanwhile held close to the
43-month low seen in September, with the latest reading
consistent with a longer-term trend of decelerating price
pressures across the service sector.“

This article was written by Justin Low at www.forexlive.com.

After a bit of a lackluster start to the session in Europe, we’re starting to see things pick up again now nearing US trading. The dollar opened with a gap lower with focus on the US election tomorrow and is now starting to track back to the lows for the day. USD/JPY is back down to 151.60 with eyes on its 200-day moving average of 151.54 currently. The pair had opened with a gap lower of around 152.16 at the start of trading this week.

Elsewhere, EUR/USD is also hovering near the highs for the day with the pair up 0.7% to 1.0910 currently. Meanwhile, USD/CHF is down 0.9% to 0.8623 and GBP/USD up 0.4% to 1.2975 at the moment.

All of this comes with 10-year Treasury yields being pinned down by almost 11 bps to 4.276% on the day. It had started off European trading around 4.31%, just to give a bit of context to the moves during the session.

It’s all about the US election tomorrow and the moves here are reflective of a change in odds for Harris since the weekend. From earlier in the day: Dollar on the backfoot with focus on the US election tomorrow

And in case you missed the other headlines:

• Three reasons why US presidential odds have tightened
• Harris odds jump further after influential Iowa poll shows her with a shocking lead
• Final New York Times poll shows razor-tight Presidential race

Here’s the latest odds as we look to the day ahead:

This article was written by Justin Low at www.forexlive.com.

• There are some challenges but the picture is not as negative as some make it to be
• The world economy is doing well
• We are very positive on demand both in the short and long-term
• Peak demand is not going to happen, the world keeps on growing

His comments come after the bloc decided to delay the planned output increase in December over the weekend here. As ever, OPEC remains the one to be the most bullish about the oil market prospects and unsurprisingly so.

This article was written by Justin Low at www.forexlive.com.

The move here is to largely deal with „hidden debt“ or what is intricately known as debt arising from local government financing vehicles (LGFV). These are off-balance sheet debt that are incurred by local governments to finance big projects and infrastructure. For some context, local governments in the past were not allowed to sell bonds and so resorted to establishing LGFVs to raise funds.

*coughs* And surprise, surprise. That didn’t turn out too well. As of last year, IMF estimated China’s „hidden debt“ to be around above ¥60 trillion. That translates to roughly half of the country’s GDP. Danger, danger.

And with China’s property sector imploding in recent years, that has impacted revenues of local governments and in turn raises the odds of these LGFVs going bust. So, that brings us to where we are now.

Chinese lawmakers are now said to be considering a bill to raise ceilings on local government debt and this will effectively be a one-off measure to replace these supposed „hidden debt“. The Chinese ministry of finance has had many plans since 2015 to try and address this and this is just another part of that.

Just be wary though that this is a sort of left pocket to right pocket situation. What this effectively does is move the supposed „hidden debt“ back on to the balance sheets of local governments. It still does not completely address the fiscal sustainability of it all and the structural risks in servicing the debt.

But I would assume as part of this measure, China will also announce some plan to allow local governments to issue a sizable amount of bonds through the next three to four years to deal with all of this.

Otherwise, it’s not exactly a full proof plan and that will not ease investor concern and trust in Beijing’s handling of this matter. That especially with Xi having pinning this item as one of China’s three „major economic and financial risks“ – alongside the property market and financial sector concerns.

This article was written by Justin Low at www.forexlive.com.

Fundamental
Overview

Crude oil opened the day
with a positive gap today following the weekend news of OPEC+ delaying the December
production hike.

In the big picture, central
bank easing generally leads the manufacturing cycle, so we can expect global
growth to pick up and support the crude oil market. One risk that might be
weighing on the market is the US election as a Trump victory might be bearish
due to increased supply expectations.

It’s worth remembering that
in 2016, crude oil did fall initially on Trump’s victory but eventually rallied
for more than 20% in the following three months on higher global growth
expectations.

In case we get a red sweep,
the market will likely focus on global growth with Trump’s tax cuts. In case we
get Trump and a divided Congress, we can expect him to focus majorly on tariffs
and that could dent global growth and put some pressure on the market.

With Harris as President and a divided Congress we should see crude oil gaining as she needs a legislative action to raise taxes and has a
lighter stance on tariffs. A blue sweep could still be bullish but with a lesser degree.

Crude Oil
Technical Analysis – Daily Timeframe

On the daily chart, we can
see that crude oil is now back at the key 71.67 resistance following the OPEC+ production hike
delay. The buyers will want to see the price breaking higher to increase the
bullish bets into the 77.60 level next. The sellers, on the other hand, will
likely lean on the resistance to position for a drop into the 65 handle.

Crude Oil Technical
Analysis – 4 hour Timeframe

On the 4 hour chart, we can
see that we have a minor upward trendline defining the current bullish
momentum. The buyers will likely keep on leaning on it to keep bidding the
price up, while the sellers will want to see the price breaking lower to
increase the bearish bets into the 65 handle.

Crude Oil Technical
Analysis – 1 hour Timeframe

On the 1 hour chart, we can
see the gap higher today following the weekend news with the price now near the
key resistance. There’s not much to add here as the buyers will look for a
break higher, while the sellers will step in to position for a drop into new
lows. The red lines define the average daily range for today.

Upcoming
Catalysts

Tomorrow we have the US ISM Services PMI and the US Presidential Election. On
Thursday, we have the US Jobless Claims and the FOMC Policy Decision. On
Friday, we conclude the week with the University of Michigan Consumer Sentiment
report.

This article was written by Giuseppe Dellamotta at www.forexlive.com.