A huge day for the US and the Trump administration.

The EUR/USD made small gains yesterday after remaining largely flat. The pair opened at $1.14053 and hummed along, climbing to $1.14250 before falling to a low of 1.13903. The euro bounced off that low, posting gains until it peaked at $1.14371. It was unable to hold onto those highs and is currently trading at $1.14244. The GBP/USD fared better than its European counterpart overnight. The pair opened at $1.30352 and climbed in early trading, reaching $1.30847 before falling to lows of $1.30199 shortly afterwards. From there, the pound rallied for the rest of the session, peaking at $1.31061 during the closing hour. It is not far off that high, currently trading at $1.30972.

The Dow rallied overnight as the election booths opened for the Congressional elections. The index opened at 25,478.98 and remained flat early before falling to a low of 25,408.77. The Dow then rallied in the back half of the session, peaking at 25,700.20. It has opened a bit lower this morning and is currently trading at 25,640.55. The Dax opened and closed flat but there were some movements in between. The German index opened at 11,506.80 and climbed to an early high of 11,546.20. The Dax tumbled shortly after that peak, falling to a low of 11,432.70 a couple of hours later. it spent the rest of the session in recovery mode, posting gains and eventually closing at 11,532.70.

The day ahead is a big one for markets as polling booths begin to close in the US. These mid-term elections could have ramifications for the Trump administration. If voting goes the way as expected, the Democrats will win congress, while Trump’s Republican party looks set to hold onto the senate. This will mean that the President will find it hard to push his economic and political agenda as he now has to negotiate with the Democrats, who have been hostile towards him since his election in 2016. Compromises will need to be made in order for him to get things done, including further tariffs on other nations such as China. If the Republicans hold onto the senate as expected, it will make it near-impossible for the Democrats to start impeachment proceedings against the President. This could all mean that the Government goes into gridlock, with both sides having to give up ground in order to get things done. This seems a hard task considering how polarised both sides have become.

Data set for release today includes:

UK – Halifax HPI

Canada – Ivey PMI

US – Crude Oil Inventories, Consumer Credit

Japan – Average Cash Earnings, Leading Indicators

NZ – Inflation Expectations, Official Cash Rate, RBNZ Monetary Policy Statement, Rate Statement and Press Conference

Europe – German Industrial Production, European and Italian Retail Sales, Swiss Foreign Currency Reserves, Swiss Governing Board Member Fritz Zurbrugg speaks

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