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| Asian markets show jitters as US polls narrow gap between Trump and Clinton Asian markets show jitters as US polls narrow gap between Trump and Clinton | |
| (about 2 hours later) | |
| Asian shares stumbled and the US dollar was on the defensive on Wednesday amid signs investors were becoming spooked by polls narrowing the gap between US presidential nominees Donald Trump and Hillary Clinton. | Asian shares stumbled and the US dollar was on the defensive on Wednesday amid signs investors were becoming spooked by polls narrowing the gap between US presidential nominees Donald Trump and Hillary Clinton. |
| Market anxiety has deepened over a possible Trump victory given uncertainty on the Republican candidate’s stance on issues including foreign policy, trade relations and immigration, while Clinton is viewed as a candidate of the status quo. | Market anxiety has deepened over a possible Trump victory given uncertainty on the Republican candidate’s stance on issues including foreign policy, trade relations and immigration, while Clinton is viewed as a candidate of the status quo. |
| Stocks across Asia Pacific saw a broad selloff on Wednesday with the Nikkei in Japan down by 1.8% at 4am GMT. There were also steep falls in Australia where the ASX/S&P 200 benchmark index was down almost 1.5%, with falls of 1.3% in South Korea and Hong Kong as markets took a lead from a sharp drop on Wall Street overnight. | Stocks across Asia Pacific saw a broad selloff on Wednesday with the Nikkei in Japan down by 1.8% at 4am GMT. There were also steep falls in Australia where the ASX/S&P 200 benchmark index was down almost 1.5%, with falls of 1.3% in South Korea and Hong Kong as markets took a lead from a sharp drop on Wall Street overnight. |
| The main European markets were also expected to begin the day in the red when they open later, according to futures trading. | The main European markets were also expected to begin the day in the red when they open later, according to futures trading. |
| The tumultuous presidential race appeared to tighten after news that the FBI was reviewing more emails as part of a probe into Clinton’s use of a private email server. | The tumultuous presidential race appeared to tighten after news that the FBI was reviewing more emails as part of a probe into Clinton’s use of a private email server. |
| While Clinton held a five-percentage-point lead over Trump, according to a Reuters/Ipsos opinion poll released on Monday, other polls showed Trump ahead by 1-2 percentage points. | While Clinton held a five-percentage-point lead over Trump, according to a Reuters/Ipsos opinion poll released on Monday, other polls showed Trump ahead by 1-2 percentage points. |
| That pushed the US S&P500 Index down to a four-month closing low on Tuesday. The CBOE volatility index, often seen as an investors’ fear gauge, briefly rose to a two-month high, above 20%. | That pushed the US S&P500 Index down to a four-month closing low on Tuesday. The CBOE volatility index, often seen as an investors’ fear gauge, briefly rose to a two-month high, above 20%. |
| In the currency market, traders sold the dollar partly as they suspect Trump would prefer a weaker dollar given his protectionist stance on international trade. | In the currency market, traders sold the dollar partly as they suspect Trump would prefer a weaker dollar given his protectionist stance on international trade. |
| The euro rose to a three-week high of $1.1069, up about 2% from its seven-and-a-half-month low of $1.0851 hit just over a week ago. Against the yen, the dollar slipped to 104.03 yen from three-month high of 105.54 yen set on Friday. | The euro rose to a three-week high of $1.1069, up about 2% from its seven-and-a-half-month low of $1.0851 hit just over a week ago. Against the yen, the dollar slipped to 104.03 yen from three-month high of 105.54 yen set on Friday. |
| Koichi Yoshikawa, executive director of financial markets at Standard Chartered Bank, said: “If you had a long dollar position on the view that the dollar would gain because Clinton would win, you would surely close that position because her victory is less certain.” | Koichi Yoshikawa, executive director of financial markets at Standard Chartered Bank, said: “If you had a long dollar position on the view that the dollar would gain because Clinton would win, you would surely close that position because her victory is less certain.” |
| “And people were buying back the euro because that is the currency that had been being shorted the most against the dollar,” he added. | “And people were buying back the euro because that is the currency that had been being shorted the most against the dollar,” he added. |
| Other haven assets were also favoured, with the Swiss franc rising to 1.0782 francs per euro, its highest level since late June. Gold hit a four-week high of $1,291.6 per ounce on Tuesday and last stood at $1,288.5. | Other haven assets were also favoured, with the Swiss franc rising to 1.0782 francs per euro, its highest level since late June. Gold hit a four-week high of $1,291.6 per ounce on Tuesday and last stood at $1,288.5. |
| In contrast, the Mexican peso, seen as the most vulnerable to a Trump presidency due to his proposal to build a border wall, posted its biggest fall in two months. The peso slid to 19.265 to the dollar, its lowest level since early October. | In contrast, the Mexican peso, seen as the most vulnerable to a Trump presidency due to his proposal to build a border wall, posted its biggest fall in two months. The peso slid to 19.265 to the dollar, its lowest level since early October. |
| It provides a tense backdrop for the Federal Reserve’s two-day policy meeting. It is due to issue a statement later on Wednesday. | It provides a tense backdrop for the Federal Reserve’s two-day policy meeting. It is due to issue a statement later on Wednesday. |
| While traders do not expect the central bank to raise interest rates just a week before the presidential election, they are looking for signs the Fed is set to raise rates in December. | While traders do not expect the central bank to raise interest rates just a week before the presidential election, they are looking for signs the Fed is set to raise rates in December. |
| US interest rate futures are pricing in about a 70% chance of a rate rise in December but virtually no likelihood of a rise on Wednesday. | US interest rate futures are pricing in about a 70% chance of a rate rise in December but virtually no likelihood of a rise on Wednesday. |
| Oil prices tumbled to one-month lows as a trade group’s report of larger-than-expected US crude inventory added to growing doubts over whether oil-producing countries could agree on output cut later this month. | Oil prices tumbled to one-month lows as a trade group’s report of larger-than-expected US crude inventory added to growing doubts over whether oil-producing countries could agree on output cut later this month. |
| Brent crude futures fell to $47.90 per barrel, having hit a low of $47.72 on Tuesday. | Brent crude futures fell to $47.90 per barrel, having hit a low of $47.72 on Tuesday. |
| However, even as investors were moving out of riskier assets, copper bucked the trend, rising to a three-month high of $4,922 a tonne. | However, even as investors were moving out of riskier assets, copper bucked the trend, rising to a three-month high of $4,922 a tonne. |