By IFCMarkets
S&P 500 fell for 9th straight day. This is its record long losing streak in recent 35 days. US dollar index dropped for 6th day in a row. Main reason for such a trend is high political risks ahead of presidential elections in US. Additional negative came with the US labour market data for October. FBI decided not to open a criminal case against Democrat candidate for presidency Hillary Clinton on Monday. Previously, such a risk was the main factor dragging markets down. So the news pushed US stock index futures and US dollar index up. No significant economic data came out in US on Monday. On Tuesday November 8 the presidential elections will take place in US. Recent polls of NBC-Wall Street Journal suggest that rating of Hillary Clinton is 4% above the rating of Donald Trump. According to Real Clear Politics, Hillary Clinton leads Donald Trump just by 1.8% points.
European stock indices followed the Wall Street price trend. They all fell on Friday and rebounded on Monday. European banking sector was among the growth leaders with HSBC stocks advancing 4% on strong earnings data and forecasts. German Deutsche Bank released report according to which European indices are to rise by around 5% in case Hillary Clinton wins. If Donald Trump wins, Deutsche Bank expects the European indices to fall by 5-10%. Weak factory orders and retail PMI came out on Germany on Monday. But investors shrugged off the data on the positive from US. Euro edged lower on higher US dollar index. Some investors expect significant euro fluctuations after the elections. The believe the victory of Hillary Clinton may push the EUR/USD rate down to 1.09 while its defeat – up to 1.14.
Nikkei followed other stock market indices. It edged lower on Friday to rebound on Monday. Yen weakened a lot on Monday after previous upward trend. Market participants considered the Japanese currency as safe-haven assets amid higher risks in US.
Stronger US dollar weighed on gold and other precious metals. External trade data for October will come out early on Tuesday in China. They may affect commodity futures, the outlook is negative.
USDA will release its monthly WASDE report for November on November 9, 2016 at 17:00 GMT. It may affect grain futures prices.
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Sugar prices edged higher after the US government prolonged the period for consideration of trade agreement with Mexico. It imposes many restraints on sugar import from Mexico to US since late 2014. Ministry of agriculture of France revised up the forecast for sugar crops this year from 32.3mln tonnes to 33.5mln.
Cocoa prices slumped to 3-year low while coffee advanced to 2-year high on weather conditions in main regions of their production. Net longs in coffee approached the high of February 2008, according to U.S. Commodity Futures Trading Commission. As for cocoa, the net long position is still kept despite lower prices.
Oil edged slightly higher on Monday after the General Secretary of OPEC Mohammad Barkindo said the cartel was planning to cut oil output in course of its meeting on November 30.
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