Investors preparing For Election

Published by Filipe R. Costa on Tue, 06/11/2012 - 13:14
us election

Daily Market Commentary for November 6: The main equity indices ended higher Monday, recovering from part of the losses accumulated last Friday. Payrolls showed a big improvement but the uncertainty about the U.S. election is still the main driver at this point. We’ll have to wait for tomorrow before seeing any stock moves.

All eyes are currently centred on today’s U. S. election as investors try to discern the differences from each candidate, especially in terms of future policy, the FED, and the fiscal cliff. Obama will lead to more quantitative easing as Ben Bernanke will stay in office but may mean problems with the fiscal cliff. Romney will certainly stop Bernanke’s movements but may be better for the fiscal cliff negotiations. In either case there arguments in favour and disfavour. What the market currently needs is to surpass this event.

During last night, the Reserve Bank of Australia kept its key interest rate unchanged against all the expectations. In fact, the latest inflation data show an uptick, and the RBA preferred to wait instead of easing too much. The Aussie gained.