Drumroll Please and The Winner Is

US election results are imminent and markets are on edge. The Australian dollar was the top performer while the yen lagged. The Asia-Pacific calendar is virtually vacant but the reaction to the election will dominate markets in any case. Ashraf's Premium Insights will be due out later this evening.

InTrade shows Obama as a 70% favorite and a Romney win would be considered a upset at this point. Gold climbed $31 alongside Obamas chances today, adding credence to Ashrafs scenario analysis suggesting that a Romney win would hurt gold.

The worst case near-term scenario is extremely close or disputed election outcome. If markets awaken tomorrow to the potential for a long, drawn out court battle for the White House, it will assuredly spark a flight to the yen.

If the results is clear-cut, disappointed or elated traders could make knee-jerk trading decision on Wednesday. Such moves are likely unsustainable and will be slowly reversed, especially if Congressional leaders show any willingness to work together.

Technicals are generally favorable to short-term US dollar strength but also showing signs of indecision. The euro climbed to 1.2827 in US trading retesting the 200-day moving average in the process. The Dollar Index is also very close to the 200-DMA.

The first election exit polls will be releases at 2100 GMT as polls close in some Eastern states. It may not be for another 4-5 hours until any clarity emerges.

Other items on the calendar are the Australian AiG construction index and the UK BRC shop index but they will be mere blips on the radar until the election is sorted out.

-AB