US Elections: Modest market impact – Rabobank

Sandeep Kanihama FXStreet Contributor

In the US midterm elections, the Democrats won the House by a comfortable margin, while the Republicans expanded their control over the Senate on expected lines and the impact on the markets is relatively modest, points out the research team at Rabobank.

Key Quotes

“The popular-vote margin is estimated to be 7.5%-point in favour of the Democrats, the biggest gap since 2008 and somewhat higher than expected in the latest polls.”

“The Democrats faced a brutal map in the Senate and a heavily gerrymandered House. In any other election, a result like this would probably have been regarded a landslide.”

“It has now been confirmed that the Democrats have won 218 seats in the House of Representatives, while the Republicans have won 192. In the Senate, the respective results are 45-51.”

“A few interesting things to note are that Trump has done very well with his core voter base, while the Democrats were able to urge their supporters to vote, which is already a win by itself in mid-term elections.”

“The opposite results in the House and the Senate once again expose the deep cultural divide between those who live in big cities and suburbs and those who live in the rural, conservative areas. This sets the stage for a very interesting presidential race in 2020.”

Author

Sandeep Kanihama

FXStreet Contributor

Sandeep Kanihama is an FX Editor and Analyst with FXstreet having principally focus area on Asia and European markets with commodity, currency and equities coverage. He is stationed in the Indian capital city of Delhi.

EUR/USD flirts with daily highs, retargets 1.1900

EUR/USD regains upside traction, returning to the 1.1880 zone and refocusing its attention to the key 1.1900 barrier. The pair’s slight gains comes against the backdrop of a humble decline in the US Dollar as investors continue to assess the latest US CPI readings and the potential Fed’s rate path.

GBP/USD remains well bid around 1.3650

GBP/USD maintains its upside momentum in place, hovering around daily highs near 1.3650 and setting aside part of the recent three-day drop. Cable’s improved sentiment comes on the back of the Greenback’s irresolute price action, while recent hawkish comments from the BoE’s Pill also collaborate with the uptick.

Gold holds above $5,000 as bears seem hesitant amid Fed rate cut bets

Gold edges lower at the start of a new week, though it defends the $5,000 psychological mark through the Asian session. The underlying bullish sentiment is seen acting as a headwind for the bullion. However, bets for more rate cuts by the Fed, bolstered by Friday's softer US CPI, keep the US Dollar bulls on the defensive and continue to support the non-yielding yellow metal as the focus now shifts to FOMC Minutes on Wednesday.

Week ahead: Data blitz, Fed Minutes and RBNZ decision in the spotlight

The US jobs report for January, which was delayed slightly, didn’t do the dovish Fed bets any favours, as expectations of a soft print did not materialize, confounding the raft of weak job indicators seen in the prior week.

Global inflation watch: Signs of cooling services inflation

Realized inflation landed close to expectations in January, as negative base effects weighed on the annual rates. Remaining sticky inflation is largely explained by services, while tariff-driven goods inflation remains limited even in the US.

Ripple Price Forecast: XRP potential bottom could be in sight

Ripple edges up above the intraday low of $1.35 at the time of writing on Friday amid mixed price actions across the crypto market. The remittance token failed to hold support at $1.40 the previous day, reflecting risk-off sentiment amid a decline in retail and institutional sentiment.