Comey Clears Clinton, Eyes on Polls
USD stabilized briefly in early Monday Pacific trade after the FBI cleared Hillary Clinton of any wrongdoing in the latest series of emails. USDJPY soared to 104.30s from 103.20s before retreating back to 103.80s. On Friday saw the ninth consecutive day of losses in the S&P 500, a pattern not seen since 1980. Most exposure should be hedged or sidelined by now and markets will revert to searching for signals about the vote. Last week, NZD and GBP were the top performers while CAD and USD lagged. CFTC positioning showed increasing AUD longs and euro shorts. The latest in the Premium Insights closed the USCrude short at 48.10 for a 320-pt gain.
US dollar weakness last week underscores the stakes in the election as the race appears to narrow. Trump clearly has some momentum. A WSJ/NBC poll released Friday showed Clinton leading by 4 points but the same pollster showed her up 11 points in mid-October.
The final polls will be rolling out ahead of election day.
Indications from States will also be drivers. Florida officials report that 45% of registered voters had already cast a ballot as of Friday. They show 2.26m registered Democrats and 2.21m registered Republicans having already voted along with another 1.2m independents.
Florida will be among the first States to report final results and it's imperative for Trump that he wins it. If he does, election night may come down to Nevada, where voting closes three hours later.
Polls in that State have been thin but tend to show Trump ahead. However markets on Monday may lean towards Hillary because early voting shows huge turnout in the area around Las Vegas, which is a Democratic stronghold. Moreover, data shows that 6 percentage points more Democrats have voted early compared to Republicans. It's also a State where 70% of voters cast ballots early in 2012 so the lead may be virtually insurmountable.
If that angle gains traction on Monday/Tuesday, look for risk assets and USD/JPY to climb ahead of the results.
In terms of economic data, the BOJ minutes for the Sept 21 decision are due at 2350 GMT. That's followed 10 minutes later by Japanese labor cash earnings for Sept. They're expected to rise 0.2%.
Commitments of Traders
Speculative net futures trader positions as of the close on Tuesday. Net short denoted by - long by +.
EUR -137K vs -124K prior JPY +43K vs +45K prior GBP -83K vs -84K prior CHF -20K vs -19K prior AUD +41K vs +32K prior CAD -16K vs -13K prior NZD 0K vs 0K prior
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