Hello traders, welcome to election week in the US, where the eyes of the financial world are on the critical developments that will shape market movements, particularly for stocks and the American dollar. While Monday's calendar is typically quiet, this week is marked by anticipation and preparation as market participants brace for the outcomes of the US elections. The voting will commence tomorrow, but given the tight race, it may take some time to determine the final results.
Starting with indices, futures have opened the week with mixed signals, hovering around the zero mark and indicating a cautious start. This reflects the uncertainty in the market as traders await potential shifts influenced by the election outcomes. The American indices, which entered a bearish correction last week, remain under close scrutiny. Whether this correction continues or reverses will likely depend on election-driven sentiment.
On the currency market, there are more defined movements. The American dollar is currently the weakest major currency, experiencing a decline that began in recent weeks. This trend is juxtaposed with the strength observed in European currencies, notably the British pound and the euro. Currencies from Eastern Europe are also showing gains, demonstrating a region-wide trend of euro-centric strength. Traders will be closely watching if the dollar's weakness persists throughout the week or if it manages to stabilize post-election.
In the commodities sector, oil is experiencing a bullish start, showing gains that signal optimism or supply concerns amidst geopolitical considerations. Meanwhile, metals are attempting to push higher as well. Gold and silver, in particular, are in focus as investors seek safe-haven assets amid the uncertainty tied to the elections and broader market movements.
Although the earnings season in the US is winding down, it’s still relevant for traders to keep an eye on notable releases. The previous week saw the biggest hitters disclose their earnings, with significant implications for the markets. This week, however, only a few noteworthy companies, such as Qualcomm on Wednesday, remain on the earnings calendar. These reports, while not as influential as last week’s, could still stir specific market segments.
As we head further into the week, the primary narrative will undoubtedly revolve around the elections and how their results impact the market's outlook. The American dollar’s trajectory, the performance of indices amidst potential policy shifts, and the continued examination of commodities will be areas of interest for traders. The market's response in the coming days will provide insights into broader economic expectations and investor confidence moving into November.