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REFILE-GLOBAL MARKETS-Stocks whipsaw, bonds rally as U.S. vote agonisingly close

Published 11/04/2020, 11:09 AM
Updated 11/04/2020, 11:10 AM
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(Corrects to fix translation in graphic)
* Asian stock markets: https://tmsnrt.rs/2zpUAr4
* S&P futures whipsawed as U.S. vote proves too close to
call
* Dollar rallies, 10-yr Treasury yields down sharply
* Gold retreats, oil clings to gains
* Graphic: 2020 asset performance http://tmsnrt.rs/2yaDPgn
* Graphic: World FX rates in 2020 http://tmsnrt.rs/2egbfVh

By Wayne Cole
SYDNEY, Nov 4 (Reuters) - Asian share markets turned
skittish and S&P futures wobbled on Wednesday as results from
the U.S. presidential election showed an agonisingly close race
with no clear winner yet in sight.
Investors had initially wagered that a possible Democratic
sweep by Joe Biden could ease political risk while promising a
huge boost to fiscal stimulus, hitting the safe-haven dollar and
bonds.
But the mood quickly sobered on signs President Donald Trump
could well snatch Florida and was much closer in other major
battleground states than polls had predicted. (Who is winning?
Click on "In typical election risk-driven fashion it's been the
stairs up and express elevator down as early results, especially
out of Florida, are pointing away from the quick Biden outcome
markets were looking for," said Stephen Innes, Chief Global
Markets Strategist at Axi.
"Markets have taken a step back from the Democratic sweep
scenario."
Instead, investors were now hedging against the risk of a
contested election or at least a drawn-out process as mail-in
ballots were counted.
That saw 10-year Treasury yields dive all the way back to
0.80% US10YT=RR , from a five-month top of 0.93%. The fall of 7
basis points on the day was the largest since mid-May.
E-Mini futures for the S&P 500 ESc1 veered wildly between
negative and positive and were last up 0.36%. EUROSTOXX 50
futures STXEc1 lost 0.5% and FTSE futures FFIc1 0.8%.
Japan's Nikkei .N225 was still ahead by 1.4%, but MSCI's
broadest index of Asia-Pacific shares outside Japan
.MIAPJ0000PUS shed 0.6%.
"It's a wait-and-see," said Matt Sherwood, head of
investment strategy at Perpetual in Sydney.
"I think the odds of a clean (Democrat) sweep are
diminishing, almost by the minute. That reduces the possibility,
or the likelihood at least of a large stimulus program being
agreed to in the first days of a Biden administration."
The U.S. dollar likewise reversed early losses and climbed
1% on a basket of currencies to 94.071 =USD . The euro fell
back hard to $1.1634 EUR= and away from a top of $1.1768.

Investors are still awaiting the outcome of Federal Reserve
and Bank of England meetings this week, which are expected to at
least give a nod to further stimulus.
The Reserve Bank of Australia on Tuesday cut interest rates
to near zero and boosted its bond-buying program, adding to the
tidal wave of cheap money flooding the global financial system.
Gold had recently been buoyed by all this liquidity but ran
into profit taking on Wednesday, losing 1.1% to $1886 an ounce.
Oil prices pared their early gains as the election outcome
turned murky. O/R
U.S. crude CLc1 were up 43 cents at $38.09, with Brent
crude LCOc1 futures also gaining 43 cents to $40.14.

<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
Asia stock markets https://tmsnrt.rs/2zpUAr4
Asia-Pacific valuations https://tmsnrt.rs/2Dr2BQA
Key emerging currencies being split by U.S. election https://tmsnrt.rs/326Toa7
Global markets since Trump's election https://tmsnrt.rs/3jNwnis
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