Markets Ricochet as Clinton, Trump Trade Lead in Florida
November 08 2016 - 9:00PM
Dow Jones News
Markets around the world shimmied Tuesday night, with early vote
tallies in the U.S. elections setting off swings in currencies,
Treasurys and gold.
The dollar climbed against the Mexican peso on initial favorable
results for Republican Donald Trump in Florida, but then the peso
rallied back as numbers swung in favor of Democrat Hillary
Clinton.
Similarly, the Japanese yen strengthened and gold rallied, as
early polling results showed a slight edge for Mr. Trump in
Florida. But those gains were quickly pared on fresher voting
figures favoring Mrs. Clinton.
The yield on the benchmark 10-year Treasury note fell to as low
as 1.846% during Tuesday evening trading but recently rose to
1.891%. That was up from 1.867% during regular hour trading
Tuesday, the highest close level since May. Yields move opposite to
bond prices, which would be expected to rise on a Trump
victory.
The seesaw trading across markets could continue for some time
until more clarity emerges.
Many investors view Mrs. Clinton as the "status quo"
presidential candidate, whose policies are unlikely to inject much
volatility into markets. Meanwhile, analysts say uncertainty
surrounding Mr. Trump's policy proposals could hurt the dollar and
other risk-sensitive currencies such as the Mexican peso.
Similarly, investors believe a win by Mr. Trump would boost prices
for gold and the Japanese yen, popular safe-haven assets.
"If Trump wins...there will be more market volatility and more
action," said Nizam Idris, head of strategy for fixed income and
currencies at Macquarie Bank Ltd. in Singapore. Given the recent
rallies in U.S. stocks and the Mexican peso, "the market is
positioned for a Clinton win."
In recent days, risky assets such as stocks have risen as
Hillary Clinton pulled ahead in polls and sold off as the race
tightened. On Monday, the S&P 500 snapped its longest losing
streak in nearly 36 years with a 2.2% gain, its biggest jump since
March. The S&P gained 0.4% on Tuesday.
Many investors said they were cautious heading into Tuesday
evening, with some citing the selloff in the days immediately after
the U.K.'s surprise vote to exit the European Union.
Saumya Vaishampayan contributed to this article.
Write to Ira Iosebashvili at ira.iosebashvili@wsj.com and Min
Zeng at min.zeng@wsj.com
(END) Dow Jones Newswires
November 08, 2016 20:45 ET (01:45 GMT)
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