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Moving into the new week, however, there would be much to watch on both the political and monetary policy ends for markets to weather.
The biggest political event in the coming week with market implications will no doubt be the US mid-term elections, with polls closing on November 6. Up for contest will be all seats of the House of Representatives, signalling a potential change of control, and the likely status quo Senate with about a third of which. In what could be regarded as an upset result – the giving up of the House to the Democrats in the US’ bipartisan system – the expectations will be for more legislative gridlock. The intuitive response towards such an outcome, which interestingly had been shown to be a base case scenario in polls, will be a slump for the US dollar. The equity market, meanwhile, may not be significantly afflicted. In light of the uncertainty as to when the narrowed results could arrive, traders will likely be on standby from the close of polls, midday Wednesday here in Asia onwards. The greenback, as seen via the US dollar index, lost grounds into the end of the week and supported Asia markets, though remaining in the short-term uptrend. Watch breaks here with the impact from the election results due to help guide prices. Support comes in only around the 95.00 figure.