Market Roundup
• Stocks, USD jump as FBI clears Clinton in email probe, MXN peso rallies, Gold, USTs sag.
• Fed survey: Banks tightened lending standards for commercial real estate loans in Q3.
• ECB’s Lautenschlaeger: Benefits of easy-money policies decrease over time; risk increase.
• SNB’s Maechler: doesn’t rule out further rate cut, only if really necessary.
• Oil mixed as election seen swinging to Clinton while OPEC doubts weigh; producers disagree on who should reduce output.
• British Brexit minister Davis govt intends to trigger A50 by end of March.
Looking Ahead - Economic Data (GMT)
• 00:30 Australia NAB BusinessConditions Oct 8-previous
• 00:30 Australia NAB Business Confidence Oct 6- previous
• 23:50 Japan Foreign Reserves Oct 1260.10b- previous
• 05:00 Japan Coincident Indicator MM* Sep -0.1- previous
• 05:00 Japan Leading Indicator* Sep 1.2- previous
Looking Ahead - Events, Other Releases (GMT)
• 06:15 Australia RBA Head of International Dept Chris Ryan speaks at the 7th Pan Asian Regulatory Summit in HK
Currency Summaries
EUR/USD is likely to find support at 1.1000 levels and currently trading at 1.1041 levels. The pair has made session high at 1.1066 and hit lows at 1.1026 levels. Euro slipped lower against the greenback on Monday as the dollar strengthened across the board after the FBI decided that U.S. Democratic presidential nominee Hillary Clinton will not face criminal charges, which was seen as a boost to her chances of winning Tuesday's contest with Republican rival Donald Trump. The greenback gained 0.75 percent against a basket of currencies after getting hammered last week when FBI Director James Comey said the agency was looking at another large batch of Clinton emails, strengthening chances of a Trump victory, an outcome that was seen as likely to send shock waves through financial markets. The dollar jumped 0.73 percent against a basket of currencies after a 1.3 percent drop last week.
GBP/USD is supported in the range of 1.2230 and currently trading at 1.2403 levels. It reached session high at 1.2436 and hit low at 1.2287 levels. Sterling eased against the dollar on Monday, as the dollar rallied broadly on growing confidence that Hillary Clinton would win Tuesday's U.S. presidential election. Democratic candidate Clinton's prospects brightened on Sunday when the FBI said it would not seek criminal charges related to her use of a private email server for government work, standing by its findings in July. That sent the dollar up against most major currencies, with sterling no exception. Having rebounded almost 3 percent last week as worries eased that Britain would undergo a "hard" exit from the European Union and lose its access to the single market, the pound lost 1 percent to trade around $1.24. Worries about a "hard Brexit" were soothed last week when Prime Minister Theresa May's government lost a landmark High Court case over whether it could trigger Article 50 - which begins Britain's exit from the European Union without parliamentary approval.
USD/CAD is supported at 1.3337 levels and is trading at 1.3366 levels. It has made session high at 1.3413 and lows at 1.3359 levels. The Canadian dollar strengthened against U.S. dollar on Monday as U.S. Democratic presidential nominee Hillary Clinton got a boost ahead of Tuesday's election and oil climbed. Oil rose, helped by a commitment from OPEC to stick to a deal to cut output, but prices remained more than $7 below last month's high due to persistent doubts over the feasibility of the group's plan. U.S. crude prices were up 0.86 percent at $44.45 a barrel. Investors had been unnerved in recent days by signs of a tightening U.S. presidential race, evidently preferring what is seen as a known quantity in Clinton, over the political wild card, Trump. The Canadian dollar was last trading at C$1.3371 to the greenback, or 74.72 U.S. cents, stronger than Friday's close of C$1.3403, or 74.61 U.S. cents.
AUD/USD is supported around 0.7670 levels and currently trading at 0.7727 levels. It hit session high at 0.7729 and made session lows at 0.7688 levels. The Australian dollar edged higher against US dollar on Monday as risk appetite got a boost from news the FBI said no charges would arise from the latest email saga surrounding U.S. presidential contender Hillary Clinton. The U.S. presidential elections have dominated market sentiment in recent weeks with Clinton and her Republican rival Donald Trump neck and neck in some opinion polls ahead of the Nov. 8 presidential election. Aussie held steady against its U.S. counterpart around $0.7725 after earlier rising to a high of $0.7719, a level it has breached several times since July but failed to hold above. Traders said investors were now more confident of a victory for Clinton who is seen as the status quo candidate that would clear the way for a rise in U.S. interest rates next month. Prediction markets are giving Trump around a 1 in 5 chance of victory, down from 1 in 3 at one point last week.
Equities Recap
European shares rallied on Monday, underpinned by stronger banking stocks, as news that Hillary Clinton would not face charges over her use of emails gave her bid for the White House fresh momentum just before the Nov. 8 vote.
UK's benchmark FTSE 100 closed up by 1.5 percent, the pan-European FTSEurofirst 300 ended the day up by 1.55 percent, Germany's Dax ended up by 1.2 percent, France’s CAC finished the day up by 1.7 percent.
Shares on Wall Street rallied on the eve of the U.S. presidential election, as Democrat nominee Hillary Clinton's prospects brightened after the FBI said it would not press criminal charges against her over the use of a private email server.
Dow Jones closed up by 2.07 percent, S&P 500 ended up by 2.22 percent, Nasdaq finished the day up by 2.37 percent.
Treasuries Recap
U.S. Treasury yields rose on Monday, as risk appetite improved after the Federal Bureau of Investigation cleared Democratic presidential candidate Hillary Clinton of any wrongdoing in the use of a private email server.
In late trading, benchmark U.S. 10-year Treasury note yields were down 11/32 in price to yield 1.824 percent, up from Friday's 1.783 percent.
U.S. 30-year bond prices fell 17/32, yielding 2.598 percent, up from 2.57 percent last Friday.
Two-year note yields, which are most sensitive to interest rate changes, were at 0.817 percent, up from Friday's 0.793 percent.
Commodities Recap
Gold prices fell on Monday, posting their biggest one-day drop in five weeks as the dollar and stocks rallied on news Hillary Clinton would not face criminal charges over her use of a private email server.
The spot gold price was down 1.8 percent at $1,280.70 an ounce by 2 p.m. EST (1900 GMT). U.S. gold futures settled down 1.9 percent at $1,279.40 per ounce.
Oil prices settled more than 1 percent higher on Monday, supported by news that U.S. Democratic presidential candidate Hillary Clinton will not face charges over her emails.
U.S. West Texas Intermediate (WTI) crude settled at $44.89 per barrel, up 82 cents, or 1.9 percent. Brent crude ended 57 cents, or 1.3 percent, higher at $46.15 a barrel.
