Europe Summary and Highlights 6 November

European morning session

After gaining sharply in Asia on the news of a Trump victory and a likely Republican clean sweep, the USD was generally little changed in Europe, but the AUD and scandis rallied somewhat after overnight losses and the CAD also slightly outperformed. EUR/CHF recovered after an overnight drop. European yields were generally lower, with EUR 2 year yields down around 10bp, perhaps reflecting concerns about tariffs being imposed under Trump.

Otherwise there wasn’t much news. German manufacturing orders rose a larger than  expected 4.2% in September after a revised 5.4% drop in August, but the final Eurozone PMIs were revised higher. Neither had any notable impact on the EUR.

Asian session

The all important U.S. election have begun its closing/exit polls. While it is too early to call for swing states victory, the early exit polls seems to suggest Trump is at slight advantage or at least not as neck to neck as weekend expectations. Thus, we see a resumption Trump trade continue on Wednesday's Asia session. Early polls seem to suggest Trump has gotten North Carolina, and Georgia . They are a few of the swing state Donald Trump needs to get to have a shot at presidency. Trump trades cheer on that. As it is looking more and more likely a red sweep in the U.S. election, USD trumps major FX pairs. U.S. Treasury Yields jumped across the curve with the 10yr out performing 2yr. USD/JPY jumped to session high of 154.33 and is currently trading 1.38% higher at 153.65.

Despite U.S. three major equity indexes are cheering, regional equity indexes are mixed with the HSI leading in losses. AUD/USD is down 1.47% at 0.6541, NZD/USD fared better but still down 1.18% to 0.5936 while USD/CAD rose 0.56% as oil slips. Else, EUR/USD is down 1.3% and GBP/USD down 0.91%.