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REFILE-GLOBAL MARKETS-Stocks whipsaw, bonds rally as U.S. vote agonisingly close

Published 2020-11-03, 10:02 p/m
© Reuters.
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(Corrects to fix translation in graphic)

* Asian stock markets: https://tmsnrt.rs/2zpUAr4

* S&P futures whipsawed as U.S. vote proves too close to call

* Dollar rallies, 10-yr Treasury yields down sharply

* Gold retreats, oil clings to gains

* Graphic: 2020 asset performance http://tmsnrt.rs/2yaDPgn

* Graphic: World FX rates in 2020 http://tmsnrt.rs/2egbfVh

By Wayne Cole

SYDNEY, Nov 4 (Reuters) - Asian share markets turned skittish and S&P futures wobbled on Wednesday as results from the U.S. presidential election showed an agonisingly close race with no clear winner yet in sight.

Investors had initially wagered that a possible Democratic sweep by Joe Biden could ease political risk while promising a huge boost to fiscal stimulus, hitting the safe-haven dollar and bonds.

But the mood quickly sobered on signs President Donald Trump could well snatch Florida and was much closer in other major battleground states than polls had predicted. (Who is winning? Click on typical election risk-driven fashion it's been the stairs up and express elevator down as early results, especially out of Florida, are pointing away from the quick Biden outcome markets were looking for," said Stephen Innes, Chief Global Markets Strategist at Axi.

"Markets have taken a step back from the Democratic sweep scenario."

Instead, investors were now hedging against the risk of a contested election or at least a drawn-out process as mail-in ballots were counted.

That saw 10-year Treasury yields dive all the way back to 0.80% US10YT=RR , from a five-month top of 0.93%. The fall of 7 basis points on the day was the largest since mid-May.

E-Mini futures for the S&P 500 ESc1 veered wildly between negative and positive and were last up 0.36%. EUROSTOXX 50 futures STXEc1 lost 0.5% and FTSE futures FFIc1 0.8%.

Japan's Nikkei .N225 was still ahead by 1.4%, but MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS shed 0.6%.

"It's a wait-and-see," said Matt Sherwood, head of investment strategy at Perpetual in Sydney.

"I think the odds of a clean (Democrat) sweep are diminishing, almost by the minute. That reduces the possibility, or the likelihood at least of a large stimulus program being agreed to in the first days of a Biden administration."

The U.S. dollar likewise reversed early losses and climbed 1% on a basket of currencies to 94.071 =USD . The euro fell back hard to $1.1634 EUR= and away from a top of $1.1768.

Investors are still awaiting the outcome of Federal Reserve and Bank of England meetings this week, which are expected to at least give a nod to further stimulus.

The Reserve Bank of Australia on Tuesday cut interest rates to near zero and boosted its bond-buying program, adding to the tidal wave of cheap money flooding the global financial system. had recently been buoyed by all this liquidity but ran into profit taking on Wednesday, losing 1.1% to $1886 an ounce.

Oil prices pared their early gains as the election outcome turned murky. O/R

U.S. crude CLc1 were up 43 cents at $38.09, with Brent crude LCOc1 futures also gaining 43 cents to $40.14.

<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ Asia stock markets

https://tmsnrt.rs/2zpUAr4 Asia-Pacific valuations

https://tmsnrt.rs/2Dr2BQA Key emerging currencies being split by U.S. election

https://tmsnrt.rs/326Toa7 Global markets since Trump's election

https://tmsnrt.rs/3jNwnis

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