The U.S. Presidential Election 2020 is finally over and the declared winner is Joe Biden.
China, South Korea and Singapore led Asia’s trade-reliant stocks and currencies higher on Monday, after the U.S. presidential election result, boosting risk appetite and hopes of friendlier policy towards the region and Beijing.
China’s yuan rose as much as 0.6% to hit a 28-month peak, while Indonesia’s rupiah, whose high interest rates make it one of the region’s most popular local bond markets for foreign investors, gained 0.7%.
China’s imports grew 4.7% and exports rose by 11% year-on-year as its economy continued to recover from the coronavirus pandemic, according to October customs data released on Saturday. As a result, its October trade surplus widened to USD58.44 billion from September’s USD37.00 billion.
China has largely managed to control the virus after a disastrous start to the year that saw Beijing lock down tens of millions of people and the economy contract 6.8% in the first quarter. The new figures from China’s General Administration are the latest sign of China’s economic recovery as consumption returns to normal levels.
Japan’s Nikkei share average on Monday reached a high last seen almost three decades ago, after Joe Biden clinched the U.S. presidency, with Honda Motors leading gains among carmakers on strong earnings figures.
Investors, who had held off purchases last week due to U.S. political uncertainty, rushed to buy as they focused on Biden’s ability to expand fiscal stimulus and measures to reduce the spread of COVID-19.
Honda Motor gained 9.4% after the carmaker posted strong quarterly earnings and raised its earnings outlook.
The U.S. dollar fell to a 10-week low after more states were called for Biden on Saturday after days of counting, helping South Korea’s won scale its highest since February 2019 and the Singapore dollar touch its strongest level since the start of the year.
The tighter-than-expected election, which may leave Republicans in control of the Senate, appears to have doused some hopes for a large U.S. fiscal package, but leaves the door open to less combative relations with China, the region’s key growth driver.
In the US on Friday, Wall Street ended mixed, with the Dow Jones Industrial Average down 0.2%, S&P 500 flat and Nasdaq Composite closing 0.3% higher.
Traders are also wary as coronavirus cases surge, with the global tally of infections topping 50 million on Sunday as cases in the United States surpassed 10 million – stoking worries of more lockdowns.
Stock prices in London are seen opening higher on Monday as Joe Biden was declared the winner of the US presidential election over the weekend.
UK Prime Minister Boris Johnson and European Commission President Ursula von der Leyen agreed during a phone call on Saturday to “redouble efforts” to reach a trade deal and signed off on talks continuing next week.
Downing Street said the PM told his Brussels counterpart that there remained “significant differences” in the UK-EU negotiations, with the two sides continuing to be apart on their positions over fishing rights and a level playing field agreement.
The euro was priced a USD1.1889, flat from USD1.1887. Against the yen, the dollar was quoted at JPY103.52, down from JPY103.71.
In the economic calendar this week, a quiet Monday is headlined by German trade balance data at 09.00 GMT +2, while China inflation data is due early Tuesday. On Thursday, there is the U.K. trade balance and German consumer price index data at 0700 GMT, followed by US consumer prices at 15.30 GMT +2. Friday is headlined by eurozone GDP data at 12.00 GMT+2 and US producer prices at 15.30 GMT +2.
All these events and more have the potential to influence the markets which means there is plenty of trading opportunities.
Today’s High Impact Events
The times below are GMT+2.
Monday 9thNovember
11.25 – ECB President Lagarde Speaks
Potential instruments to Trade: EUR Crosses.
12.35 – BOE Gov. Bailey Speaks
Potential instruments to Trade: GBP Crosses.
Tuesday10thNovember
03.30 – CPI y/y & PPI y/y
Potential instruments to Trade: CNY Crosses.
12.00 – ZEW Economic Sentiment & German ZEW Economic Sentiment
Potential instruments to Trade: EUR Crosses.
19.00 – FOMC Member Kaplan Speaks
Potential instruments to Trade: USD Crosses & Gold.
21.00 – FOMC Member Quarles Speaks
Potential instruments to Trade: USD Crosses & Gold.
Wednesday 11thNovember
03.00 – New Zealand Official Cash Rate, RBNZ Monetary Policy Statement & Rate Statement
Potential instruments to Trade: NZD Crosses.
04.00 – RBNZ Press Conference
Potential instruments to Trade: NZD Crosses.
Bank Holiday
France, Canada & the U.S. have a national holiday today.
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