US stocks surged as a Democrat election victory lifted hopes for a quicker end to the Middle East war. Treasury yields and the dollar fell. Oil plunged while gold rallied strongly. Today’s focus shifts to the Bank of England decision and guidance, alongside US weekly unemployment claims and central bank speeches.
📊 Equities
US stock markets surged higher in trading yesterday as a resounding Democrat victory in the mid-term elections boosted hopes of a quicker end to the war in the Middle East. The Dow led the charge, jumping 3.03% to 53,356, while the S&P 500 gained 1.58% to 7,688 and the Nasdaq rose 1.44% to 25,736 as investors welcomed the prospect of reduced geopolitical tensions.
🛢️ Oil
Oil prices took a massive hit as traders moved quickly to price in the possibility of a swifter resolution to the US conflict with Iran. Both major contracts crashed more than 8% on the day as the geopolitical risk premium came under significant pressure. Brent crude fell 8.72% to $94.58, while WTI dropped 8.39% to $88.03.
🥇 Gold
Gold moved sharply in the opposite direction, jumping 3.49% to $4,065.13 as the weaker dollar and falling Treasury yields provided strong support for the precious metal.
💵 FX & Bonds
US Treasury yields dropped across the curve as traders reassessed the outlook. The 2-year yield fell 5.0 basis points to 4.581%, while the 10-year yield declined 7.4 basis points to 4.888%. The dollar also lost ground against the majors, with the Dollar Index falling 0.36% to 101.53.
| Market | Change | Close |
|---|---|---|
| Dow | +3.03% | 53,356 |
| S&P 500 | +1.58% | 7,688 |
| Nasdaq | +1.44% | 25,736 |
| USD | -0.36% | 101.53 |
| US Treasury – 2 Year | -5.0 bps | 4.581% |
| US Treasury – 10 Year | -7.4 bps | 4.888% |
| Oil – Brent | -8.72% | $94.58 |
| Oil – WTI | -8.39% | $88.03 |
| Gold | +3.49% | $4,065.13 |
📌 Today’s Focus (AEDT)
Traders are expecting another lively day in financial markets today following yesterday’s significant moves, with the focus shifting back towards central banks and economic data. The Bank of England will take centre stage in the European session, with markets expecting a 25-basis-point rate hike. However, the real focus will be on the accompanying statement and press conference, with traders looking for clues on the MPC’s plans for further tightening. US weekly unemployment claims will also be closely watched as markets continue to assess the likelihood of another Fed hike in December.
🔹 European Session – 11.00 pm – UK – Bank of England Interest Rate Decision
🔹 European Session – 11.30 pm – UK – Bank of England Press Conference
🔹 European Session – 11.40 pm – Switzerland – Swiss National Bank Chairman Martin Schlegel Speaks
🔹 US Session – 12.30 am – US – Weekly Unemployment Claims Data
🔹 US Session – 2.30 am – Canada – Bank of Canada Governor Tiff Macklem Speaks