Investing.com - Here are the top five things you need to know in financial markets on Tuesday, November 8:
1. Investors await election results
Voting kicked off on Tuesday as around 226 million eligible voters are set to decide whether Republican nominee Donald Trump or Democratic candidate Hillary Clinton will be the next U.S. president.
With Clinton in a narrow lead, nerves were on edge as most analysts predicted a market rout if Trump became the surprise victor.
Market news was awash with comparisons to the U.K.’s referendum on its membership in the European Union which, despite all polls pointing to a victory for the “Remain” campaign, ended in a Brexit triumph.
The first exit polls, which are a projection, are expected to come out on Tuesday night at around 7:00PM ET (00:00 GMT on Wednesday). Results will be declared state by state.
If the outcome is clear, the television networks are expected to make their official call at 11:00PM ET (04:00 GMT Wednesday).
2. Global stocks on pause ahead of election outcome
After Monday’s rally on the news that the FBI again found no case of wrongdoing in its examination of Clinton’s e-mails which markets interpreted as a sign that the Democratic candidate’s chances to become president had improved, investors were cautious about placing more money into equities on Tuesday.
Asian stocks closed mostly higher, though signs of caution were clear in Tokyo as the Nikkei closed with meager losses of just 0.03%.
European stocks traded mixed in early morning trade with moves limited by the focus on the U.S. elections.
U.S. futures were pointing to slight losses at the open on Tuesday as investors took profits after Wall Street staged its biggest jump since early March a day earlier. At 5:58AM ET (10:58GMT), the blue-chip Dow futures edged down 0.07%, S&P 500 futures slipped 0.13% and the Nasdaq 100 futures dropped 0.14%.
3. Mexican peso takes a breather
The Mexican peso gave up some ground against the dollar (USD/MXN) on Tuesday after having jumped 4.2% in the last three trading sessions in a sign that investors believe a victory for Clinton over her Republican rival Donald Trump in Tuesday’s election is now more likely.
The Mexican currency, which has acted as a barometer of the markets' perception of a likely Donald Trump victory, has been sensitive to developments in the election amid fears that a victory for Republican candidate Donald Trump could damage the country’s economy based on his promises to renegotiate the North American Free Trade Agreement.
4. Traders keep watchful eye on gold
Gold prices inched higher during European hours on Tuesday, as financial markets awaited the outcome of the U.S. presidential election.
The safe haven asset has undergone severe market moves as developments surrounding the presidential race caused volatility.
Prices of the yellow metal rallied to a five-week high of $1,309.30 last Wednesday, as investors were rattled by signs the U.S. presidential election race was tightening.
It then sank to a one-week low of $1,278.60 on Monday as demand for safe-haven assets ebbed after the FBI said that no charges were warranted in the case of Democrat Hillary Clinton's use of a private email server.
5. Crude buoyed by Clinton victory bets
Oil prices were higher in mid-day European trade on Tuesday, extending sharp gains from the prior session as market players positioned themselves for a win by Hillary Clinton in the U.S. presidential elections.
Crude jumped more than 1% on Monday as risk appetite improved on the news that Clinton was off the hook with the FBI.
Markets have tended to see Clinton as the status quo candidate, and news favoring her bid often boosts risk appetite.
Meanwhile, oil traders continued to weigh prospects of a coordinated production cut among major global oil producers.
The Iranian energy minister said on Tuesday that he was optimistic of a deal being reached at the official OPEC meeting on November 30, though analysts remained skeptical of a significant deal being hammered out that could dent the global supply glut.
U.S. crude oil futures gained 0.40% to $45.07 at 5:58AM ET (10:58GMT), while Brent oil traded up 0.50% to $46.38.