Business Don't miss out on the headlines from Business. Followed categories will be added to My News. When it comes to US election day , follow the money and the global markets rather than betting markets.
The weight of money flowing through stocks, currencies, commodities and bonds in real time may be best barometer of the likely outcome before any official verdict. It all boils down to “risk on”. That is, global investors being comfortable enough with the outcome to take on more risky assets such as shares.
Risk “risk off” an outcome that would be seen as bad for markets and the economy and a move into gold or even sending assets offshore. Asia is the active trading time zone which is the first to digest the early vote count, and this gives Australian markets a front-row seat on the direction of the election. When Biden won in 2020 it was risk-on.
Australia’s S&P/ASX 200 rose 1.75 per cent that day. But when Trump unexpectedly won in 2016 it was risk-off.
The ASX lost 1.9 per cent that day as US stock index futures were slammed. Dow Jones index futures diving 4.
4 per cent in APAC trade. If it’s risk-off, then stocks get slammed along with “risk-currencies” like the Aussie dollar and Euro, and potentially also the industrial commodities like copper. “Safe-havens’ like the US dollar, gold and government bonds should benefit.
But if it’s risk-off, then those patterns will be reversed. Of course the focus on US fiscal, trade and immigration policy in this .
