Equities Take a Turn For the Worse as Risks to Rally Mount

Equities in Europe started the session poorly and the US followed suit, with the three major indices all falling as much as 3% as a burst of equity negative newsflow mounted, leaving the recent rally at risk. German software firm SAP sharply revised their outlook lower, leading their shares to trade lower by over 20%. This led tech firms lower, with China's sanction of US aerospace & defense firms adding to the downside.

Polling continues to suggest Trump's paths to a second term are dwindling, with Monday's broad-based move lower in stocks a possible sign that equities are pricing in a straightforward Blue Wave at next week's election. Despite the range in stocks, currencies were rangebound, but the over-arching risk-off tone fed into USD strength.

Focus Tuesday turns to September durable goods orders and consumer confidence data from the US. RBA's Debelle & Bullock and ECB's de Cos are due to speak.