The Morning Update

While there are still some votes to be counted, Fox News have projected that Trump has defeated Harris in the 2024 election. The Republican have won the control of the Senate while the House has yet to be called. The USD rallied 1.5%, oil and the equity markets have risen 1.2% and 2.2% respectively while treasury yield inched higher. The Federal Reserve is expected to cut interest rates by 25bps on Thursday.

In other news. Netanyahu fired his defence minister Gallant due to a crisis of trust. Gallant wrote that his removal was the results of 3 issues. No exceptions for military service (Ultra Orthodox are exempt), a national inquiry was needed to learn lessons and the hostages should be brought back as soon as possible. Protest erupted in Israel calling for Netanyahu’s resignation. Russia floats idea of 'reset' with United States after Trump declares victory. Ukraine says it fought N Korean troops for first time. China will work with US, government says, but more rivalry expected under Trump.

In currency markets. The US$ has strengthened against currencies across the board. It rallied 1.5% against the JPY, 1.2% against the CNY, 1.8% against the THB, 2.7% against the MXN (2-year low), 1.7% against the ZAR. The AUD and NZD faired a little better losing 0.8% and 0.6% against the greenback. Bitcoin hit record high breaking US$75k.

In commodity markets. The focus is that if we will see a Trump 2.0 scenario, we are likely to see tariffs on Chinese goods, which is negative for metals with China being the big consumer of copper, iron ore and steel. Oil is down on worries over economic growth as tariffs are not good for overall global demand. The potential of new tariffs causing concerns on trade which put some pressure on oil prices (-1.2%). These same tariffs would also have an impact on inflation which has caused some headwind for both gold (-0.8%) and silver (-1.4%).

Current level USD Index                           104.991             Up 1.51%

The USD/CAD has strengthened on the back of the Trump lead, retreating oil prices and dovish BoC minutes were also to blame.

Current level USDCAD                              1.3907                 Up 0.61%

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The EURCAD took a beating on the back of the EUR poor performance as a result of the US elections. For the moment the currency pair is holding near 1.4900, which is near a 4-month low.

Current level EURCAD                               1.4903                 Down 1.32%

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The EUR/USD slightly recovers to 1.0750 after nosediving to near 1.0700, the lowest level in over four months. The major currency pair hits badly as Republican candidate Donald Trump takes the Senate from Democrats after gaining an unconquered lead in key battleground states.

Current level EURUSD                               1.0719                 Down 1.94%

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The GBPEUR rallied as the market awaits the BoE interest rate decision. UK central bank is anticipated to reduce its interest rate from 5.0% to 4.75% at its Monetary Policy Committee meeting on Thursday. The markets believe the heightened UK government spending may be inflationary, triggering the BoE to slow the expected path of rate cuts.

Current level GBPEUR               1.2007 (.8327)                    Up 0.74%    

The GBP has been affected by the strong USD on the back of the US election results. Market will now focus on the BoE’s rate decision later in the week.

Current level GBPUSD                               1.2859                 Down 1.39%

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