The dollar falls as the Midtermen House bring Democrats

The dollar falls as the Midtermen House bring Democrats

Wednesday 6:55 GMT

What you need to know

  • US stock futures are rising as US election results are in the meantime
  • Dollar and Treasury bond yields are rising as Democrats take over the house
  • The benchmark of the Asian equity markets mingled with earlier broad price gains
  • Oil prices continue to fall, with the US dollar falling below $ 62 a barrel

Leading quote

"This election result creates a headwind for economic activity. Economic policy uncertainty is a major obstacle to private sector decision-making, and business people and investors will not be sure which direction legislation will take in the future. , , including whether the tax cuts for 2017 should be reversed by 2021 "- Vincent Reinhart, chief economist at Standish, part of BNY Mellon Investment Management.

"If the president is even more determined on trade and immigration, there is a danger that tariffs and restrictions will be a detrimental cost shock to the US economy."

Brisantes topic

The dollar plunged earlier and US equity futures rebounded slightly as the Democrats gained enough seats to take control of the house, controlling the government of Donald Trump.

The S & P 500 futures rose 0.2 percent, while the dollar index, a measure of the greenback against a basket of counterparts, fell 0.3 percent. 10-year government bond yields fell 4bps to 3.1838% after reaching a high of 3.249%.

European stock exchanges will rise in the opening trade, as the CMC markets demand with the openings. The London FTSE 100 should rise by 0.4 percent, the Xetra Dax 30 in Frankfurt rose by 0.6 percent.

The steps were taken when the Democrats in Parliament took more than 23 seats from the Republicans, which exceeded the level required to control the Chamber. In the Senate, however, the party suffered a stinging defeat, in which the Republicans were ready to strengthen their influence.

A divided Congress – with Democrats taking over the House of Representatives and Republicans under the Senate's control – will limit Mr. Trump's ability to enforce changes in fiscal and spending policies or trade policies.

"It seems the way most market participants think it will evolve," said Brian Levitt, Senior Investment Strategist at Oppenheimer Funds. "If you had chosen a Republican wave, you might have seen a repeat of what you saw after Trump's surprise victory," he said. "They need a catalyst to release the expectations of a stimulus."

Stocks and forex

The broadly higher benchmark values ​​for equities from Asia and the Pacific were mixed as the US results became clear. Hong Kong's Hang Seng Index lost 0.1% in afternoon trade. In China, the CSI 300 index of Shanghai and Shenzhen listed shares rose 0.3 percent.

Tokyo's Topix lost 0.1 percent, while Seoul's Kospi Composite fell 0.3 percent. In Sydney, the S & P / ASX 200 Index gained 0.4% as the rise in financials offset the decline in mining shares.

The dollar lost value against Asian currencies. The Japanese yen rose 0.2 percent against the greenback at ¥ 113.25. The British pound rose 0.2 percent to $ 1,3127, while the euro rose to $ 1,1451.

raw materials

Oil prices continued to fall overnight after a slump. Brent declined 0.2 percent to $ 71.97 a barrel as concerns over global supply shortages eased despite formal US sanctions on Iranian crude oil exports. In the US, West Texas Intermediate fell 0.5 percent to $ 61.89.

Gold, which often serves as a haven, rose 0.1 percent to $ 1,227.75 an ounce.

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