Ibex pushed down by US elections in early morning trade

Markets are focused on US elections day as its rallied on Monday looking forward and hopeful that finally Hillary Clinton wins against Donald trump. European stocks seem to continue on Tuesday with the increases we saw on Monday, which were 1.5% on average (for now, the Ibex adds 0.14% up). In Asia, except the Nikkei, which has ended practically flat with slight losses, the rest of indexes have closed higher.

Today the United States will vote for their next President, which will help determine the outlook for the country in the coming years. As Philip Marey notes in a report published yesterday, both Clinton and Trump want to provide the US economy with much needed fiscal policy stimulus. However, the timing, size, shape and funding of the fiscal impulse will also depend on the election outcome for the Senate and the House of Representatives.

The fiscal impulse will be larger and reach the economy earlier if one party controls both the White House and the Congress. In case of a divided government, it will take more time to negotiate an agreement on a fiscal policy stimulus package, which may also get complicated by negotiations on the debt limit and a continuing resolution needed to avert a government shutdown. This package may be limited to infrastructure, which is one of the few topics both parties agree on.

ASIA CLOSE

In Asian Equity Markets stocks rose on Tuesday as world markets braced for the outcome of one of the most contentious U.S. presidential elections in history, with most investors cautiously optimistic of a win by Democrat Hillary Clinton. MSCI's broadest index of Asia-Pacific stocks outside Japan was up 0.4 percent. The Nikkei ended 0.03 percent lower at 17,171.38 points after flirting with positive territory briefly. In Hong Kong, the Hang Seng index ticked up 0.3 percent. China's CSI 300 index index added 0.4 percent, with relief over improving prospects of a Clinton win offsetting bigger-than-expected declines in both imports and exports and a smaller-than-forecast trade balance in October.

CURRENCY MARKETS

In Currency Markets the dollar steadied in Asia on Tuesday, keeping previous session gains as markets wagered on a victory for Hillary Clinton in the U.S. presidential election after the FBI cleared her of any wrongdoing in its latest probe of her use of a private email server. The greenback was steady against the perceived safe-haven yen at 104.44, well above a one-month low of 102.54 yen plumbed on Thursday. The euro was also steady against the dollar at $1.1040, well shy of its Friday peak of $1.1143, which was its highest since Oct. 11. The Australian dollar gave back some of its overnight gains after rising 0.7 percent on Monday, its biggest daily percentage gain since Oct. 19. It was last down 0.4 percent at $0.7699.