Too Close To Call

Pretty much everything else took the back seat overnight, as the U.S. elections stole the show. Betting markets drove the choppy price action, with initial risk-on impetus dissipating as Trump took over as the betting favourite, even as the general view is that it remains a very tight race. A tech-driven rebound in e-minis offered risk some relief, but a sense of broader caution remained, amid expectations that the winner of the White House race won't be known today. The greenback shook off its initial weakness and shot higher, outperforming all of its G10 peers, with the DXY showing at best levels since Sep 28.

• Riskier currencies swung to a loss vs. USD as early results boosted perceived odds of Trump's re-election. AUD & NOK led losses in G10 FX space, with above-forecast Australian retail sales overshadowed by election jitters.
• Officials remain vigilant over the ramifications of today's poll. BoJ Gov Kuroda underlined the importance of FX markets stability, while the BoK is set to hold a meeting today to take stock of the impact of the election.
• USD/CNH saw some violent moves, which resulted in a brief move above the 50-DMA. The moving average remained intact since early Jun. Weaker than exp. PBoC fix was overshadowed by broader cross-currents. The rate is still elevated, but sits off highs as we type.
• MXN got battered by the aforementioned betting markets dynamics. However, USD/MXN eased off highs after rejecting resistance from the 23.6% retracement of Apr 6 - Oct 27 slide/round fig. of MXN22.0000, as a spill-over from firmer equity markets kicked in.
• Today's data highlights include global Services PMIs, while central bank speaker slate features ECB's de Cos, Panetta, Muller & Schnabel. It goes without saying that election matters remain front and centre, with further results trickling in.