Today’s markets open with European equities trading slightly up, showing modest gains in early trading hours. This aligns with marginally positive movements in US futures, hinting at cautious optimism among investors as they weigh recent updates on the US election landscape, economic indicators, and critical sector movements across commodities and bonds.

Election News Shifts Investor Sentiment

The weekend saw a notable shift in US election odds. PredictIt, a leading prediction market, has moved in favor of a Harris victory, with the latest NYT/Siena polls showing the race tightly contested across six of seven critical battleground states. This development has put the USD under some pressure, as investors adjust their portfolios away from “Trump trades,” which traditionally favor assets like the USD under an administration known for its distinct economic approach.

Bond Markets Reflect Political Sentiment

In bond markets, we’re seeing a ripple effect from the political developments. US Treasuries (USTs) have gained ground with the decline of “Trump trades,” attracting more inflows as investors brace for potential shifts in fiscal policy under a Harris-led administration. European Bunds, however, are lagging behind their US counterparts, pressured by reports that China’s National People’s Congress (NPC) is scrutinizing local government debt swaps. This concern adds complexity for investors eyeing the global debt landscape, especially with China’s regulatory environment in focus this week.

Commodities: Oil Gains on OPEC+ News, Base Metals Ride China Optimism

Crude prices are up, buoyed by reports suggesting that OPEC+ may postpone its December oil production increase by one month. This delay could help rebalance supply levels in anticipation of sustained demand recovery. Base metals are also seeing a positive move as investors anticipate potential policy support measures stemming from the ongoing China NPC meetings. With China’s significant role in global demand, any indications of infrastructure spending or economic stimulus could give these markets a substantial boost.

Key Data and Earnings on the Horizon

Today’s calendar includes several economic data releases and corporate earnings reports that could further shape market sentiment. On the data side, investors will be looking at the US Employment Trends Index and Durable Goods orders for insight into the current health of the US economy. Additionally, the final Australian PMIs will offer a gauge of economic recovery in the Asia-Pacific region. In Europe, comments from European Central Bank members Elderson and Holzmann may provide clues on monetary policy direction, with the US set to issue further supply.

Meanwhile, earnings reports will be key, with several major companies set to release their results. Investors will pay close attention to companies across tech, energy, and hospitality sectors, including Fidelity National Information Services, NXP Semiconductors, Vertex Pharmaceuticals, Diamondback Energy, Palantir Technologies, Marriott International, and Fox. Each of these companies brings insight into sector-specific performance and consumer demand trends, providing valuable indicators as markets approach the final quarter of the year.

With markets navigating a complex mix of political, economic, and corporate updates, investors will likely remain watchful. The shifting US election odds, potential OPEC+ adjustments, and policy moves in China are key areas to monitor in the coming days. The backdrop of a tightly contested election and the prospect of policy changes across the board creates an atmosphere where even slight shifts could lead to market recalibrations.