News

Stock Futures Soar; Dollar Falls as Post-Election Rally Continues

Equities

Futures tied to major US stock-indices extended upside rally, as Biden won the race to become the next President of the United States. The battleground states kept the race tight and delayed the results. However, Biden was able to secure Pennsylvania, which was enough for him to attain more than 270 electoral votes. The market is cheering the probability of the massive fiscal stimulus that Democrats were demanding. It is still early to decide how Biden will deal with the trade war with China, but he could have a softer stance on the markets than Trump. The Dow Jones Industrial Average futures rose to 28628, the S&P500 futures raced higher to 3563, and Nasdaq futures advanced to 12406.

USD

The dollar index which, measures the greenback against a basket of major currencies, extended declines falling to a ten-week low of 92.13 following Biden's win. The end of the Presidential race bolstered risk appetite, where investors were seen dumping the US dollar and rushing towards riskier currencies. On the other hand, the prospects of implementing a large fiscal stimulus package to cope with the new wave of Coronavirus weighed on the dollar. The EURUSD surged to $1.1898, and the GBPUSD rallied to $1.3199.

Metals

Precious metals prices gained further as the dollar declined. The price of a gold ounce continued the push higher, trading at $1965, the highest since the 16th of September. The price of a silver ounce rose to $26.01, while palladium futures retreated from an eight-month high of $2509.

Oil

Oil prices rebounded slightly, supported by better risk appetite. Biden's win boosted risk-on mood, but it is still early to deduce how his policies will impact the markets. Meanwhile, investors are worried about the effects of the Corona wave on oil-demand levels. The International Energy Agency Head stated that the current movement restrictions in Western countries would likely weigh on oil demand. The West Texas Intermediate crude December delivery rose to 38.36, and Brent Blend January delivery climbed to $40.66.

Major Economic Events

GMT Country Event Expectation Previous

9:25

EZ

 ECB President Lagarde Speaks 

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10:35

UK

 BoE Gov Bailey Speaks 

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