It has been a momentous week defined by anticipation, tension and drama around the US presidential election.

The outcome of this historic election remains on a knife-edge, with Donald Trump and Democrat challenger Joe Biden going toe to toe in key swing states. Investors across the globe are likely to adopt a guarded approach amid the cliffhanger vote count with full unofficial results from key swing states – Pennsylvania and Georgia – expected later today. Although Biden may clinch the presidency with just one more state, the race for the White House remains too close to call. Even if this becomes reality, concerns are elevated over Trump contesting the results of certain states, ultimately opening the door to more uncertainty. Given how officials have already warned that it may take days or even weeks for the final results amid the huge number of postal ballots, markets could be in for a rocky ride for the rest of 2020.

Asian shares were mixed this morning as investors awaited more clarity from the presidential election, while gains in Europe may be capped if market players turn defensive ahead of the US jobs report this afternoon.

US jobs data in focus

Away from US politics, all eyes will be on the US non-farm payrolls report released later today.


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The headline figure is expected to have increased by 600,000 jobs in October after rising 661,000 in September.  This would make it the smallest gain since the jobs recovery started in May and give a clear indication that rising coronavirus infections are negatively impacting the economic recovery. The unemployment rate is expected to have dipped from 7.9% to 7.7% with average hourly earnings forecast to rise to 0.2% from the 0.1% seen in the previous month.

A disappointing jobs report is likely to hit sentiment towards the US economy and the threat of a contested election that reduces the possibility of another coronavirus rescue package in 2020 may rub salt into the wound.

Looking at the technical picture, the Dollar Index remains under pressure on the daily charts. Prices are trading below the 20 and 100-day Simple Moving Average while the MACD trades to the downside. A daily close below 92.70 may open a path towards 92.00 in the short to medium term. But should prices push higher and break above 92.70, the Index may venture back towards 93.30.

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