The financial markets are abuzz with the upcoming presidential election in the United States. Though mail-in and early voting has been going on for weeks, Americans will head for the voting booths tomorrow for the final time in this election, so instruments associated with the US dollar are bound to be volatile.
Incumbent President Donald Trump appears to be gearing down for a loss, despite improving his standing in several swing states in the last couple of days. Trump stated that he will bring “[his] lawyers” as soon as the results are out, suggesting that he expects a loss that he is preparing to challenge.
The other major news on everyone’s mind is the coronavirus pandemic, which remains the single most important factor for the markets this year. The Covid-19 situation has been worsening around the globe, with Europe and the United States in the most critical condition at the moment.
Today the United Kingdom announced a nation-wide lockdown, following the example of other major economies in Europe such as France and Germany. The UK has joined the list of countries with over 1 million coronavirus infections. France has close to 1.5 million, while Germany is behind with around half a million Covid-19 cases, but has been seeing record daily increases over the past week.
The United States is still the most worrisome country when it comes to the coronavirus. It added over 70,000 new cases to its tally yesterday, contributing to a total of 9.4 million cases.
Despite the spread of the virus in the US, today stock indices are making a modest recovery. The wins come as a correction due to recent drops to multi-month minimums across all US indices.
Meanwhile, traders interested in the emerging markets should pay attention to Russia, whose currency dropped to a five-year minimum against the USD. The country has been affected by lower oil demand and a coronavirus outbreak of its own. In addition, if Biden does indeed win the US election, Russia may face a harsher treatment from the United States.
As for the economic calendar, today PMIs are key. Data from Spain, Italy, Germany, and the eurozone as a whole was better than anticipated. Later in the day we expect the PMI reports from Canada and the US.
