Biden's victory, divided government.

 

Written: 20/11/05 07:00 GMT FXTM Senior Market Strategist Hussein Sayed

With the volatility index plummeting, the market continues to watch for political uncertainty, and investors are looking for comfort in reliable growth stocks. President Trump's chances of re-election have been reduced as Biden won key contenders Wisconsin and Michigan last night, leaving only seven electors until his final election.

Major U.S. stocks closed higher, led by NASDAQ, which rose 3.5 percent, and futures index has continued to rise since then. Asian stock markets are similar, with the Nikkei index rising 1.3 percent, surpassing the 24,000 mark for the first time since January.

Sluggish stimulus spending and a forecast of U.S. growth have sent investors back to the top-tier tech shares. The state of Nevada will announce the results at noon New York time, with the results expected to be determined later today.

As mentioned yesterday, the Democratic Party's overwhelming victory in economic growth and inflation is boosting its reflationary trade (the act of selling long-term bonds and buying stocks in anticipation of a pick-up in the economy and inflation), which is causing bond sales to plummet.

The fact that the U.S. 10-year earnings rate has fallen more than 0.2% in the past 24 hours seems to suggest that the market expects Biden's victory and a split Congress. With the Democratic Party's domestic policy falling into lame duck status, there will be no tax increases, infrastructure spending and green energy spending.

Dollar plunge, today FOMC

The dollar has revalued Biden's tenure this week and is the lowest gain in major currencies as the EUR/USD falls to 1.1740. The market will pay attention to the Fed's economic assessment and future guidance on bond purchases in consideration of the second wave of Korona at today's Fed meeting.

Yesterday, EUR/USD surged, but the dollar's attempt to rise soon hit a wall and returned to the box. 1.1612 proved to be a strong support line and the 50th parallel near 1.1775, the first line of resistance, is consistent with yesterday's high point.

Bank of Youngran's GBP stimulus of GBP

Earlier today, the Bank of England (BoE) announced a surprise larger-than-expected additional stimulus package to boost consumption spending. MPC says it has added 150 billion pounds to buy a total of 895 billion pounds of government bonds, and decided to freeze interest rates at 0.1 percent, without considering negative interest rates. The Bank of England is expecting a double-dip recession following today's second lockdown.

According to EU negotiator Barnier, there is still a "serious gap" between the two sides in the Brexit negotiations, and the EUR/GBP returned to the box office early in trading hours due to sluggish negotiations. Due to the 50th parallel, the rise above 0.9068 was limited, and today's announcement by Youngran Bank pushed it to the bottom of the box. The Brexit negotiations are scheduled to resume next week and the deadline of mid-November is approaching, so keep an eye on the news!