Weekend polls in the United States suggest that a Trump victory, which had been largely anticipated by many major capital markets, is no longer a certainty. The market’s reaction was swift, with U.S. yields and the dollar dipping in response. Equities, meanwhile, mostly rose, with U.S. index futures showing positive momentum.
Gold slipped closer to $2,730 today before stabilizing. In the energy sector, tensions remain elevated due to Iran’s threat of retaliation against Israel and OPEC+’s decision to delay production increases for a second consecutive time, which has supported December WTI prices. It’s currently trading solidly near last week’s high, just above $71.

Asia-Pacific Markets
In Japan, investors will watch for final October service and composite PMI data on Wednesday, though Thursday’s labor earnings and household spending reports may hold more significance.
Australia’s final PMI and trade data will also be released, but the primary focus will be tomorrow’s central bank meeting.
The dollar has gained in eight of the past ten sessions, with Japanese officials uncharacteristically quiet as the greenback retraced slightly lower.
The Australian dollar has faced a five-week decline, the longest since August 2023, though this downward trend has recently begun to slow.

European Markets
The eurozone takes a backseat this week with three Western European central bank meetings, the U.S. election, and the FOMC meeting on the agenda.
The euro’s recent performance has been mixed; it initially pushed above $1.09 last week following weak U.S. job growth data but subsequently reversed to test lower levels. Today, it held steady at $1.0845 before moving higher in Asia-Pacific trading to nearly $1.0905, then revisiting this level in Europe.
Sterling also reached a three-day high today, but it remained capped below the $1.30 mark.

American Markets
With the U.S. election set for tomorrow, discussions center on what looks to be an exceptionally close race, with some polls hinting at last-minute momentum for Harris. Many are also preparing for the possibility of a lengthy count and verification process. Additionally, this week brings the FOMC meeting.
The Canadian dollar recently reached new two-year lows against the U.S. dollar, which approached CAD1.3950. Since late August, the U.S. two-year yield advantage over Canada has increased from under 60 basis points to over 110 basis points, the widest gap since 1997.