Stocks and the
dollar were little changed on Tuesday as global investors trod carefully,
readying for the outcome of one of the most contentious U.S. presidential
elections in history.
Trade was largely
driven by cautious expectations of a win for Democrat Hillary Clinton, but some
sharp swings in recent days across all asset classes meant big bets were
relatively thin on the ground as Americans started voting.
Wall Street's
S&P 500, Dow Jones, and Nasdaq markets were expected to open a touch
lower
having enjoyed their best day since March on Monday, while the dollar held
steady as bonds and gold made ground.
"While the
market is broadly pricing in a Clinton victory, we are well away from the final
results," said Ipek Ozkardeskaya, senior market analyst at London Capital
Group.
"It is
certainly too early to speculate. The least we can say is that the risk
appetite is quite firm for such a high event-risk day."
At the end of a
bruising election campaign, the Reuters/Ipsos States of the Nation poll gave Clinton
a 90 percent chance of defeating Republican Donald Trump and said she was on
track to win 303 Electoral College votes out of 270 needed, to Trump's 235.
(GRAPHIC: Race to
the White House tmsnrt.rs/298mTyD)
Europe's index of
leading 300 shares, which posted its biggest gain in two months on Monday, was
flat ahead of U.S. trading. A modest 0.15 percent gain for Britain's FTSE 100
was balanced by 0.1 percent dips in both Germany and France
MSCI's broadest index
of Asia-Pacific shares outside Japan had ended up 0.6 percent overnight though
Japan's Nikkei 225 ended flat. MSCI's global index of world shares was up 0.1
percent.
BREXIT REVISITED?
China's CSI 300
index index added 0.4 percent, with relief over improving prospects of a
Clinton win offsetting bigger-than-expected declines in both imports and
exports and a smaller-than-forecast trade balance in October.
Clinton is generally
seen by investors as offering greater certainty and stability, and, until stumbling
last week after FBI Director James Comey said the agency was reviewing newly
discovered emails, had been seen as the clear favorite.
While surveys last
week showed Republican candidate Donald Trump closing in on Clinton's lead, at
least five major polls on Monday showed her still ahead.
But investors
remained wary, noting Britain's shock vote in June to leave the European Union
had wrongfooted bookmakers and most pollsters.
"A Trump
victory would be a clear risk-off event that would trigger significant
reactions and equity markets would take a sharp hit, at least in the short
term," said Andreas Johnson, economist at Swedish bank SEB.
"However, the
tightening of the polls indicate that the risk of a very close result is
substantial.".
In currency markets
the dollar, which had its best day in a month on Monday, edged slightly lower.
The dollar index, a measure of its value against a basket of currencies, fell
0.2 percent as the euro rose 0.2 percent to $1.1060.
Having recorded its
biggest one-day increase against the yen in almost four months on Monday, the
dollar was flat against the Japanese currency at 104.40 yen on Tuesday.
It was also flat at
18.5855 versus the Mexican peso, which has ebbed and flowed in recent weeks in
tandem with the perceived chances of a Trump victory.
The currency is seen
as a proxy for bets on the election because Mexico is considered most
vulnerable to Trump's trade policies as 80 percent of its exports go to the
United States.
Most bond yields
retreated on Tuesday after rising across the board on Monday. The benchmark
10-year U.S. Treasury yield fell one basis point to 1.815 percent.
Crude oil futures
were drifting lower too, with U.S. crude down 0.5 percent at $44.66 a barrel
and global benchmark Brent down 0.3 percent at $46.00 having both gained more
than 1 percent on Monday.
But safety plays
were also in favor as gold climbed 0.1 percent to $1,285 an ounce, erasing some
of its 1.7 percent loss from the previous session.
Reuters
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