SYDNEY/NEW YORK (Nov 7): Markets remained cautious in the U.S. and Asia, with few standout moves, as investors braced for American midterm election results, particularly congressional races seen as a referendum on the policies of President Donald Trump.
U.S. futures opened little changed as the first polls closed at 6 p.m. New York time, after a thinly traded session ahead of the results. Asia-Pacific contracts were also mixed.
Key News
* The first results in the midterms are expected from Kentucky and Indiana. Follow along in our live blog of the results and analysis.
* Investors have homed in on six key equity sectors with strong ties to the outcome, including healthcare and financial firms.
* Here’s a sampling of strategists’ views on what the election could bring.
* The Federal Reserve’s policy decision Thursday looms, along with ongoing tension over trade and the state of the global economy.
Moves
* Futures on Japan’s Nikkei 225 and Hong Kong’s Hang Seng Index were little changed.
* A basket of stocks identified by Morgan Stanley as most likely to benefit under Trump’s presidency is up more than 9 percent in six consecutive days of gains.
* The offshore yuan extended this week’s losses.
* The 10-year Treasury yield rose two basis points to 3.22 percent; two-year yields climbed to 2.92 percent, the highest since 2008.
* Bloomberg’s dollar index slipped 0.1 percent, edging further back after the October rally that pushed it to the highest since May 2017.
* WTI oil sank to $62.17 a barrel, the lowest in seven months, as concerns over a supply crunch eased.
* Emerging-market shares and currencies were steady.
Comments
* “All eyes are on the U.S. midterm elections today, which have resulted in a slight risk-friendly bias to markets, but a dearth of activity,” said Kit Juckes, the London-based global fixed-income strategist at Societe Generale SA. Expectations for policy gridlock are “the corner-stone of what feels like a consensual view that growth will slow,” he wrote in a note.
More Moves
* The yen slipped 0.2 percent to 113.46 per dollar.
* The offshore yuan slid 0.2 percent to 6.9230 per dollar.
* The euro bought $1.1418, up 0.1 percent.
* The pound added 0.4 percent to $1.3097.
* The New Zealand dollar soared 1.2 percent after the jobless rate fell to a 10-year low.
* Gold slipped 0.4 percent to $1,226.83 an ounce.
* Oil fell 1.5 percent to $62.17 a barrel.
Upcoming
* China trade data comes Thursday, with gauges of consumer and factory prices expected on Friday.
* Federal Reserve policy makers are expected to leave the main interest rate unchanged Thursday at their penultimate gathering of 2018.
* India is closed for the Diwali holiday.