Daily Market Color

Global Markets Welcome Clinton Exoneration, US Dollar Surges

Global markets on Monday reacted to the most recent update in the US presidential election where the FBI has reaffirmed that Hillary Clinton is not going to be charged with any crimes related to her e-mails.  After re-opening the investigation into Clinton’s emails on October 28th and adding uncertainty regarding the future leader of the world’s largest economy, the FBI announced Sunday that it would not recommend any criminal charges be pressed against the Democratic nominee.  After a tightening in the presidential race triggered investor caution over the past couple weeks, the latest news shifts the most likely outcome in favor of a Clinton election, prompting a rise in global equities and the US dollar, along with a selloff in safe haven assets.  Wall Street looks poised to end its nine-day losing streak while the dollar has gained more than 0.75% against major currencies.  The Mexican peso stands as a unique currency which rallied against the dollar from the pro-Clinton news, rising the most it has in a month as fears over a renegotiation of NAFTA and construction of a wall along the US border seem to be dwindling in likelihood.

Building alongside the market rally, prices of crude jumped as much as 1.6% throughout the session.  A significant portion of the rise came after OPEC Secretary-General Mohammed Barkindo publicly confirmed his optimism concerning the enactment of a production freeze in stating that “We as OPEC remain committed to the Algiers accord that we … put together.”  The rhetoric from Barkindo echoes much of what has already been relayed by other OPEC officials in an effort to curtail last week’s 15% dip in crude oil prices.  In the US, pipeline operators in Cushing, Oklahoma proactively shut down operations this morning after an earthquake registering a 5.0 reading struck the area last night.  After only minimal damage to infrastructure was confirmed in nearby neighborhoods, pipelines were reopened and functioning at normal capacities.  Colonial Pipeline Co. similarly opened their pipeline after being shut down due to the previous disruption, pushing gasoline futures to seven-week lows of $1.3598/gallon.  Last week, an explosion and fire in Alabama had forced the company to shut down the largest gasoline fuel line in the US for six days.  

All three major U.S. stock indexes are currently surging up near 2% for the day as Treasury yields/swap rates are up 4-6 bps across the curve, bringing the yield on the 10-year note up to 1.82%.  WTI crude added nearly 1.2%, bringing its price to $44.60/barrel while Brent crude gained 0.6% to $45.85/barrel.

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