Asian markets rose Monday as investors steel themselves for a too-close-to-call US presidential election, while Chinese leaders meet to hammer out a stimulus package that experts say could be determined by the vote. The gains came after a positive lead from Wall Street and data showing far fewer US jobs were created last month than expected, boosting hopes for a Federal Reserve interest rate cut when it gathers this week. With Democratic Vice President Kamala Harris and her Republican rival Donald Trump neck and neck ahead of Tuesday's poll, traders are keeping a close eye on any hint of an advantage either way.
The dollar slipped Monday as a fresh opinion poll in Iowa -- which Trump won in 2016 and 2020 -- showed Harris leading. A victory for Trump is seen as being positive for the dollar and pushing up Treasury yields owing to his pledges to cut taxes and impose hefty tariffs on imports. Elections for the Senate and House of Representatives are also being closely watched amid speculation the Republicans could take control of both.
"It's not just about who wins the presidency but also the composition of the House and Senate," said Peter Esho, founder of Esho Capital. "If the Republicans sweep all three, that will open the door to significant fiscal changes, which is negative for bondholders and could spell higher yields until the dust settles." The election comes days before the Fed is due to make its latest policy decision, with investors expecting 25-basis-point reduction .
