Economy

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SYDNEY(Reuters) – U.s. stock futures and the dollar pushed higher in Asia on Wednesday as early results from the U.S presidential election suggested the race remained too close to call, leaving investors jumping at shadows.As expected, Republican Donald Trump won Indiana and Kentucky while Democrat Kamala Harris captured Vermont, Edison Research projected, as polls closed in the first six U.S. states.Treasury yields climbed as some betting sites swung to favour Trump, while futures markets were still confident the Federal Reserve will cut interest rates by 25 basis points on Thursday.Analysts generally assume Trump’s plans for restricted immigration, tax cuts and sweeping tariffs if enacted would put more upward pressure on inflation and bond yields, than Harris’ centre-left policies.”As the early results come in, even though none of them are that surprising, we are seeing Treasury yields rising a little bit, the dollar strengthening, bitcoin up; kind of a classic Trump trade,” said Brian Jacobsen, chief economist at Annex Wealth Management. “There’s not a lot of conviction in these moves; it seems like these are little pops.” Yields on 10-year Treasury notes rose to 4.34%, from 4.28%, and nearer a four-month high of 4.388% touched last week. Two-year yields climbed to 4.245%, from 4.189% late n New York. S&P 500 futures were up 0.5% in choppy trading, while Nasdaq futures added 0.2%. EUROSTOXX 50 futures firmed 0.2%, while DAX futures tacked on 0.4%. MSCI’s broadest index of Asia-Pacific shares outside Japan was little changed. Japan’s Nikkei rose 1.1%, tracking rallies on Wall Street overnight. [.N[] In currency markets, the dollar index added 0.6% to 103.98. The euro slipped 0.6% to $1.0867, having hit a one-month top of $1.0937 overnight. The dollar firmed 0.5% to 152.61 yen, and further off a low of 151.34. [USD/] The dollar gained 0.3% on the offshore yuan to 7.1227 yuan. China is seen on the front line of tariff risk, and its currency in particular is trading on tenterhooks with implied volatility against the dollar around record highs.Chinese stock markets have surged to almost one-month highs as investors expect a meeting of top policymakers in Beijing this week to approve local government debt refinancing and spending.A firmer dollar combined with higher bond yields to pressure gold prices, which dipped 0.2% to $2,738 an ounce and away from a recent record peak of 2,790.15. [GOL/]Oil prices were down in early Asia trade as markets nervously waited on the U.S. election results. They had risen overnight as a storm was expected to cut U.S. output in the Gulf of Mexico. [O/R]U.S. crude lost 23 cents, or 0.3%, to $71.76 per barrel. More

Georgia is among seven battleground states likely to decide the winner of the contest, with opinion polls showing the rivals neck and neck in all seven – Arizona, Georgia, Michigan, Nevada, North Carolina, Pennsylvania and Wisconsin – going into Election Day.MARKET REACTION* S&P 500 e-mini futures rose 0.44% as early results came in* The yield on the 10-year U.S. Treasury note rose to 4.335%* The U.S. dollar index was up 0.73%* Bitcoinwas up 2.9% at $71,164 COMMENTS: JAMIE COX, MANAGING PARTNER, HARRIS FINANCIAL GROUP“The early indications are Republicans are outperforming in areas where they haven’t traditionally, in places like Miami Dade. I would imagine that at this particular moment, the Harris camp is worried. The markets are reflecting that we might know the answer sooner, rather than have to wait multiple days to have the answer to the election. That’s what markets have been most worried about, that there would be a long, drawn-out fight over who won. Being able to get a decisive winner, whoever it is, is going to be good for market and that’s what’s reflected, both in today’s performance and also the futures right now.”ALEX MORRIS, PRESIDENT & CIO OF F/M INVESTMENTS, WASHINGTON, DC“The market was well prepared for this uncertainty. Stock futures are pretty much muted right now, but everyone’s trying to take the few inches of data we’ve got right now and turn it into a mile. But while there are a lot of traders trying to get ahead of this thing, I don’t think we’ll see a real increase in activity for another hour or two, when we get to the Midwestern states, we get more data from North Carolina and some insight into Pennsylvania. There will be a lot of us up until 2 a.m. or 3 a.m. trying to figure out what is happening and what positions we may need to adjust.”JAMES KNIVETON, SENIOR CORPORATE FX DEALER, CONVERA, MELBOURNE”The market seems to be reacting to the strong showing by Trump so far in Georgia but until results start rolling in from the more urban suburbs it remains too close to call.””It is too early to call any of these races and to make any real projections on the results so far but the US dollar has regained a lot of ground lost recently, the market is clearly settling in for a long night””Risk currencies such as the AUD that appreciated ahead of a tightening race are having a pullback as Trump racks up some early wins. US Treasury yields are advancing as well reacting to the same sentiment.”BRIAN JACOBSEN, CHIEF ECONOMIST, ANNEX WEALTH MANAGEMENT, MENOMONEE FALLS, WISCONSIN“As the early results come in, even though none of them are that surprising, we are seeing Treasury yields rising a little bit, the dollar strengthening, bitcoin up; kind of a classic Trump trade. Treasury yields because of a market belief that Trump might be worse for deficit, the dollar’s move because of expectations of new tariffs, and bitcoin, well, Trump is a crypto ‘bro’. There’s not a lot of conviction in these moves; it seems like these are little pops. If conviction is high these trends move faster and farther, but this doesn’t have that snowballing feel to it. It’s still early days in terms of results.”ADAM TURNQUIST, CHIEF TECHNICAL STRATEGIST, LPL FINANCIAL, CHARLOTTE, NC    “If anything, to read through (results out so far) it is maybe more toward Trump than anything, so futures and yields are moving higher . But it’s so early to see any kind of momentum”    “I traded the 2016 election, but I am not doing it this time. I made a little bit of money, but it was a long way from my high water mark with a lot of volatility.” More

TOKYO (Reuters) -Bank of Japan policymakers shared the view that the central bank will keep raising interest rates if its economic and price forecasts are met, minutes of their September meeting showed on Wednesday.The nine-member board also agreed that the BOJ’s near-term focus should be to scrutinise the economic fallout from overseas uncertainties and unstable financial markets, the minutes showed.”A few members said the BOJ can afford to spend time scrutinising the fallout from overseas and market developments,” as the yen’s recent rebound would reduce inflationary pressure from rising import costs, according to the minutes.At the September meeting, the BOJ kept interest rates steady at 0.25%, and its governor signalled it was in no rush to raise borrowing costs further as fears of U.S. recession kept markets jittery and clouded the global economic outlook.One member said the BOJ should hold off on raising rates until overseas and market uncertainties diminish, the minutes showed.Another member also called for the need to focus on downside risks to the economy, in setting monetary policy.But one member said the BOJ “could find it appropriate to raise rates even when markets are unstable, depending on the economic and price outlook,” the minutes showed. More

In its latest report, the National Institute of Economic and Social Research painted a bleak picture for Britain’s economy over the coming years – even without Trump’s tariff plan – with growth seen slowing to 1.1% in 2026 from 1.2% next year and only reaching a lacklustre 1.7% in 2030.But the country, which is sensitive to changes in global trade flows, could post economic growth of just 0.4% next year if the U.S. implements tariffs like those Trump has promised, said Ahmet Kaya, principal economist at NIESR.The world economy would also suffer if Trump imposes tariffs of 60% on Chinese imports and 10% on imports from everywhere else, he said.”Relative stability is under serious threat by the potential raising of import tariffs in the United States,” Kaya said during a presentation of NIESR’s latest forecasts.The Bank of England would probably have to raise interest rates to counter a rise in prices caused by higher U.S. tariffs but inflation would still probably rise by between 2 and 3 percentage points over two years, he said.That kind of increase in borrowing costs would deal a major blow to the plans of the new UK government to use more borrowing in addition to tax rises to fund increased spending.Trump, who is in a tight race for the White House against Democratic Vice President Kamala Harris, has described tariffs as “the most beautiful word in the world” and says his plan would boost U.S. manufacturing, jobs and incomes and earn trillions of dollars in federal revenues over 10 years.Feeble British growth would be a setback for Prime Minister Keir Starmer, who has promised voters he will turn the economy into the fastest-growing in the Group of Seven.A rise in social security contributions paid by employers – the biggest tax rise in the government’s budget plan announced last week – would lead to a small rise in unemployment over the next five years, NIESR said. More

(Reuters) – A look at the day ahead in Asian markets. Investors in Asia are bracing for a day of potential high drama and volatility on Wednesday as the outcome of Tuesday’s U.S. presidential election begins to emerge.Whether the final result is known in Asian hours remains to be seen – that could take days if the count in certain key swing states is tight – but the yen, gold, dollar and Treasury futures could be most sensitive to election-related swings in sentiment.Wednesday’s trading in Asia may ultimately be marked by volatility and uncertainty, but markets may open on a solid footing after a strong reading of U.S. service sector activity sparked a broad-based rally on Wall Street on Tuesday.The three main U.S. equity indices rose at least 1.00%, while gauges of implied stock market volatility remained subdued. U.S. equity investors, at least, went into election day in a reasonably upbeat mood. The dollar weakened significantly and U.S. bond yields also rose, which is often a bad combination for Asian and emerging markets. Implied U.S. bond market volatility remains elevated too, with the “MOVE” index at its highest in a year.Currency market volatility is also high. A broad measure of G10 FX implied “vol” is hugging the 18-month high struck last week, while one-week dollar/Mexican peso implied vol is at the highest since March 2020 and one-week implied vol for China’s offshore yuan is at a record high. The Mexican peso and Chinese yuan are two currencies that could be hit hardest by extra trade restrictions and import tariffs imposed by Washington, a scenario most likely to play out if Donald Trump wins the election. Investors will also be sensitive to the announcement of any economic support measures from China’s Standing Committee of the National People’s Congress that is convening this week in Beijing. Shanghai stocks closed at a four-week high on Tuesday, boosted by upbeat comments from Premier Li Qiang on China’s recovery and improving economic data. Services activity expanded in October at the fastest pace in three months, a private survey on Tuesday showed.The Asian calendar on Wednesday, meanwhile, includes an interest rate decision from Malaysia, inflation data from Taiwan and Thailand, and services PMI data from Japan and India. The Bank of Japan releases minutes of its September policy meeting, and Reserve Bank of India (NS:BOI) Governor Shaktikanta Das speaks, while on the corporate front the world’s largest automaker Toyota (NYSE:TM) releases second-quarter results. Toyota is expected to post a quarterly operating profit of almost $8 billion, marking its first profit drop in two years and signaling cooler demand after a run of robust earnings helped by a consumer shift away from electric vehicles.Here are key developments that could provide more direction to markets on Wednesday:- Reaction to U.S. presidential election result- Malaysia central bank decision- Japan services PMI (October) More

When the votes are counted in the U.S. presidential election, will it be the gender gap, the income gap, the Latino vote or the media and marketing campaigns that turned out to be decisive?
CNBC senior economics reporter Steve Liesman sat down with four polling experts for an in-depth look into the data to see which ones could turn the election to either Vice President Kamala Harris or former President Donald Trump. The panel included Steve Kornacki, NBC News national political correspondent; Mark Murray, NBC News senior political editor; Micah Roberts, Public Opinion Strategies partner and CNBC’s Republican pollster; and Jay Campbell, Hart Research partner and CNBC’s Democratic pollster.

The conclusion? Yes, it is likely to be the economy. But it is also other factors such as character and turnout, which candidate represents change, who generates enthusiasm and who the persuadable voters finally decide to support that will help determine the outcome.
See the full video above to hear the discussion.

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WASHINGTON (Reuters) -With Republican Donald Trump and Democrat Kamala Harris locked in a dead heat in the race for the White House, political forecasters will be eyeing a clutch of counties across the country for clues on who has the edge once polls start to close on Tuesday evening.Here is a list of bellwether counties Reuters compiled, based on research by UBS, Goldman Sachs, Morgan Stanley (NYSE:MS), Deutsche Bank (ETR:DBKGn), Barclays (LON:BARC), Beacon Policy Advisors in Washington and Larry Sabato’s Crystal Ball (NYSE:BALL) with the University of Virginia’s Center for Politics. The list, which is not exhaustive, includes the most pivotal counties in the seven battleground “swing” states that will determine the winner. ARIZONAArizona’s Maricopa County, home to 4.5 million people — over half of the state’s population — is seen as one of the most pivotal battlegrounds across the United States, both for the presidency and the Senate.Biden in 2020 was the first Democrat to win the county since President Harry Truman in 1948, according to Beacon, and a strong performance by Harris would bode extremely well for her in the swing state.Polls there close at 9 p.m. ET (0200 GMT), but the state does not begin reporting results until roughly 10 p.m.   Election officials have warned it could take up to 13 days to tabulate all the ballots in Maricopa, according to local media reports. In 2020, the Associated Press and Fox News called the state for Biden hours after polls closed, but other outlets waited nine days to declare him the winner.FLORIDAWith Trump holding a near double-digit lead over Harris in Florida polls, the Sunshine State is not a battleground. But politicos will be watching Miami-Dade County, the state’s most populous, which is also expected to report results relatively early after polls close there at 7 p.m. ET. The county was solidly Democratic from the 2008 election cycle through to 2016, when Hillary Clinton won it by 30 points, but by 2020 Biden only had a seven-point edge.As such, it’s seen as a critical county for Harris. Further erosion of support for the vice president in the Miami area, particularly among Hispanic voters, could spell broader trouble for her, according to Beacon. Goldman Sachs analysts noted that the U.S. dollar reacted strongly to that weaker Democratic Miami-Dade result in 2020, as investors raised their bets on a potential Trump win.GEORGIAGeorgia’s DeKalb, Fulton and Gwinnett counties are also seen as bellwethers for Democrats’ performance in the state. Biden built strong margins in the urban counties, helping him narrowly win the swing state in 2020. Analysts also point to nearby Cobb County, where Democrats have been gaining votes over the last two presidential elections and which may indicate how well Harris is performing with suburban voters, a key voting bloc. Barclays also flagged Fayette County, south of Atlanta, as a county that has trended toward Democrats in the last two elections.Polls close in Georgia at 7 p.m. ET but early-vote counting starts at 7 a.m. ET, meaning the state could post results faster than some other battlegrounds. MICHIGANSaginaw County has backed the candidate who went on to win the state in every presidential race since 2008, according to Sabato’s Crystal Ball. Biden narrowly won the state in 2020.UBS and Morgan Stanley also flagged Wayne County, which includes most of the Detroit metro area, as another critical Michigan county. Biden won Wayne by a roughly 2-1 margin in 2020, but if Trump improves his margins there it could bode well for the former president in the swing state. Most polls in Michigan close at 8 p.m. ET, and the state has adopted policies since the 2020 election that should speed up vote counting. NEVADAIn Nevada, which was won by Biden by less than 3 percentage points in 2020, Clark County is the heavyweight with more than half the state’s population, including the Las Vegas area. For Trump to win Nevada, he has to minimize Democratic votes in the county. Washoe County, home to Reno and Nevada’s second most populous county, is also one to watch in the swing state, said analysts. Republicans are hoping to eat into Democratic margins there as well. Nevada polls close at 10 p.m. ET, although much of the state is expected to vote by mail, which could delay some results. NORTH CAROLINADemocrats have not won a presidential race in North Carolina since President Barack Obama in 2008, but close polling has made it a swing state in 2024. Wake and Mecklenburg counties, which host North Carolina’s biggest cities and have become Democratic strongholds, are the ones to watch, said Beacon analysts. Harris would have to run up large margins there to win back the state.Sabato’s Crystal Ball also flagged suburban Cabarrus County, which neighbors Charlotte, as another county to keep an eye on. Trump comfortably won Cabarrus in 2016, but his margin slipped by 10 percentage points in 2020, the biggest swing away from him in the state. Nash County and New Hanover County are also two counties that flipped from Trump in 2016 to Biden in 2020, according to Barclays.Polls in North Carolina close at 7:30 p.m. ET, and state officials can begin tabulating early votes at 5 p.m. ET.PENNSYLVANIAPennsylvania ultimately handed Biden the presidency four days after Election Day in 2020, and is widely seen as a critical state for both candidates in 2024. UBS analysts say a good bellwether for which way the state will go is Erie County, a working-class area that Trump won in 2016 and Biden narrowly took in 2020. Northampton County similarly flipped to Biden in 2020, and Barclays said if Trump can win Bucks County — one he narrowly lost to Biden in 2020 — it could put him on track to win the key swing state.Analysts at Sabato’s Crystal Ball also flagged Lackawanna County, home to Scranton, Biden’s birthplace. Lackawanna is another working-class county, but in contrast to Erie it has trended Republican in recent years. A strong turnout for Trump there could suggest a robust performance statewide. Polls close in Pennsylvania at 8 p.m. ET, and state officials cannot begin processing early ballots until 7 a.m. ET, which could slow results — several other swing states allow for ballot processing weeks before Election Day. WISCONSIN In 2020, Biden won over 75% of the vote in Wisconsin’s Dane County, and Harris would likewise have to lock in a large block of support there to take the state. Waukesha County, once a Republican stronghold that has drifted towards Democrats in recent elections, is another on analysts’ watchlist. Sauk and Door counties are another two swing state counties that flipped from Trump to Biden that will be on analysts’ radar as well.Polls in Wisconsin close at 9 p.m. ET, although analysts caution results could be slow as early ballots are processed on Election Day, and votes from Milwaukee sometimes are not reported until early the following morning. More