APAC stocks opened the week in positive territory, marking a strong start despite looming uncertainties surrounding major global events. Investors are eyeing a high-stakes week ahead with particular focus on the U.S. Presidential Election and key economic data releases that could set the tone for markets across regions.

Shift in U.S. Election Odds as Battleground States Show Deadlock

The latest political polls and prediction markets have heightened election anticipation. PredictIt odds swung over the weekend, now showing an edge in favor of a Harris-Biden victory. However, The New York Times/Siena final polls reveal a closely contested race, with six out of seven critical battleground states still locked in a near tie. This electoral tightrope is adding to volatility across global markets, with investors watching for potential shifts that could impact the U.S. dollar, trade policies, and global market sentiment.

European Market Futures Indicate Stability After Last Week’s Gains

European equities appear set to open steady as futures signal minimal change. The Euro Stoxx 50 futures nudged up by a modest 0.1%, following a 1.0% rise on Friday. This stability in the European markets reflects investor caution in light of this week’s major events, with investors likely weighing safe bets while assessing potential U.S. election outcomes and any resultant market implications.

Currency Markets Reflect Election Uncertainty; JPY and Antipodeans Gain as USD Softens

The U.S. dollar softened against other currencies, indicating a retraction of the “Trump trade,” which had bolstered USD through recent economic uncertainties. This softening USD has benefited currencies like the Japanese yen and the Australian and New Zealand dollars, which gained as investors looked to reduce USD exposure amid political volatility. These movements suggest markets are pricing in a higher likelihood of a potential shift in U.S. leadership, with ripple effects expected to influence trade, currency, and investment flows globally.

OPEC+ Agrees to Postpone Oil Output Increase by One Month

In a significant development for the energy market, OPEC+ announced an agreement to delay the planned oil output increase by one month, according to a Reuters source. This decision highlights OPEC+’s commitment to stabilizing oil prices in the face of weaker demand recovery, partly stemming from COVID-19 disruptions. The move is seen as a proactive attempt to prevent further price drops, giving the energy sector a buffer as demand trends remain uncertain.

Key Economic Data and Earnings Reports to Watch This Week

This week brings a variety of economic indicators and earnings reports that are likely to drive market sentiment across sectors. Key data includes:

• Economic Indicators: Eurozone Sentix Index, Manufacturing PMIs, U.S. Employment Trends, U.S. Durable Goods Orders, and Australia’s Final PMIs. Commentary from European Central Bank’s Elderson and additional bond supply from both the EU and U.S. will add to market activity.
• Earnings: Heavy hitters like Volvo Car AB, Ryanair, Kingspan, Fidelity National Information Services, NXP Semiconductors, Vertex Pharmaceuticals, Diamondback Energy, Palantir Technologies, Marriott International, and Fox are all scheduled to report earnings this week. Their results will provide insight into sectoral recovery patterns, particularly in industries affected by global lockdowns and supply chain disruptions.

In sum, the week is set to be a dynamic one for global markets. Investors will remain focused on the unfolding U.S. election, critical economic releases, and policy shifts that could reshape the global economic landscape into 2024.