“The effect of elections”: macrotrend new day
The Democrats gained control of the House of representatives, but the Senate remained with the Republicans. This is the most expected result, and he is welcomed by the markets, because control of the Senate eliminates the risk of recovery for strict regulation of the financial sector. After many surprises in the course of voting in recent years, the most likely outcome is somewhat unusual.
It often happens that after the election, even if their results fall short of expectations, a surge occurs, followed by reducing risks of uncertainty in the markets. Now the preliminary results support the positive course of trading, causing a weakening of the “safety” of the dollar. It is not surprising that the Dollar Index was down 0.2%.
In General, American sites continues recovery: futures on S&P500 came back to around the 200-day average. Growth above this line can become a positive signal, further supporting demand for stocks.
At the same time, the market focus has already started to return, and other macrotrend. At the time of writing, Chinese and Japanese Nikkei225 index returned to growth since the beginning of the day and went into the red zone on the preservation of the fears of trade wars.
The British currency is gaining at the expense of progress around talks about Brexit. Expectations of a breakthrough has allowed GBPUSD to add more than 3% since the end of October and is back above 1.31. At the same time, should be very careful about such expectations, as in recent months has been a lot of dashed hopes for a breakthrough.