Strong directional trades will be expected for certain asset classes such as the US 500 cash, spot gold, USD/MXN and the Volatility index, where we have shared in an in-depth report. Nevertheless, we may not be finding the UK Referendum as a looking glass for the upcoming elections as the market appears well aware of the probabilities on both candidates taking the oval office and the limit to one person dictating policies for the whole nation.
At this point, I do feel that we should put aside all other matters and focus solely on the elections, but I realised we have to be reminded that life goes on after the elections. Notably, China’s October trade balance and inflation data will be released in the following week. An improvement to China’s trade is expected based on market consensus while the inflation rate is also expected to accelerate in the upcoming release. Given that China’s trade data will be due ahead of the elections, some ripple may still be seen in the neighbouring markets, such as for the HSI, though the impact may be contained with risk aversion at its heights.
A series of data is also expected to come from other Asian economies including Q3 GDP figures from Indonesia, Hong Kong and Malaysia while the Bank of Thailand, Bangko Sentral ng Pilipinas and Bank of Korea will hold their central bank meetings in the week.