📍 Election Day: Will Risk Assets Pump or Plunge?!

Good Morning!

As we hit Election Day after a campaign season that reads like a political thriller, markets are playing it cool – though that's just on the surface. Oil's making moves, jumping 3% after OPEC+ hit pause on output hikes again. The real action? Yuan volatility is through the roof, signaling serious jitters about potential trade war sequel. The smart money's hedging its bets, with odds tightening in recent days. A Trump win could send the dollar climbing, while bitcoin hodlers are eyeing his crypto-friendly stance. Battleground states go dark at midnight GMT, but don't hold your breath for quick results – we might be in for a drawn-out count.

In today’s email:

• Elections: US Elections dominate the headlines today

• Bitcoin: Still under $69k as we await election outcome

• USDG: New USD stablecoin in town

• Gold: Could we see a sell off after election clarity?

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THE BIG IDEA

A perfect storm brews this week as markets juggle election uncertainty, Fed's next move, and global central bank decisions, with potential for significant market turbulence

Welcome to what might be the most nail-biting week of 2024. We're staring down a triple threat of market-moving events that could shake up your portfolio faster than you can say "volatility."

First up: The election showdown. With Harris and Trump locked in a dead heat (yes, you read that right), markets are getting jittery. National polls show a tie, and betting markets have done a complete 180° from their previous Trump-leaning stance. Here's the kicker – any election uncertainty could send both stocks and bonds tumbling, as yields climb higher on market anxiety.

Meanwhile, the Fed's getting ready for their show, with markets practically betting the house on a 25bps cut

But here's where it gets spicy: Recent economic data's been running hotter than a summer sidewalk, and the Fed might just use this to justify a more hawkish stance for 2025. Markets have already priced in 73bps of cuts – a full cut less than the Fed's projections.

To top it off, we've got the RBA and BOE entering the chat. While both are expected to stick to script (RBA holding at 4.35%, BOE cutting to 4.75%), their commentary could give the dollar an unexpected boost if they lean dovish, as recent economic data suggests they might.

Last week's preview? The S&P 500 shed 1.5%, tech stocks took a bigger hit, and Treasury yields kept climbing. Consider it a warm-up act for what could be an absolutely wild week ahead.

MARKETS AT A GLANCE

TOP NEWS

Post-election market analysis reveals a pattern of initial volatility followed by year-end gains, but 2024's unique circumstances could challenge historical trends

The stock market's post-election playbook isn't exactly a straight shot to profit paradise. Historical data since 1980 shows major indexes typically stumble in the first week after ballots close, but here's the silver lining – they tend to recover within a month. With 2024's neck-and-neck race potentially dragging on, expect some serious market gymnastics before finding solid ground.

Prediction market platform Polymarket raises eyebrows with aggressive US influencer marketing despite domestic trading ban

In a twist that perfectly captures 2024's wild election season, Polymarket's been playing a curious game – paying US influencers to hype election betting while technically being banned from taking US bets. The platform dropped $270K on Meta ads and recruited meme pages like @moist and @hoodclips, claiming they're just "driving eyeballs." But with crypto whales placing million-dollar Trump bets, the waters are getting murky.

OPEC+ surprises markets with supply cut extension, signaling potential shift in strategy amid global oil market dynamics

The oil market's getting a morning jolt after OPEC+ pulled a surprise move, delaying their planned supply increase by another month. Initially set for December, the 2.2m b/d cut extension hints at a deeper strategy shift. Sure, October saw OPEC pump more crude (thanks, Libya), but here's the kicker – markets might stay oversupplied through 2025 without extended cuts.

CRYPTO

Bitcoin volatility hits pause pre-election as traders hold their breath, with analysts predicting significant post-election price swings

The crypto markets have entered stealth mode, with Bitcoin's volatility index doing its best impression of a flat line. After hitting a three-month peak of 65.7, it's now chilling at 63.2. Traders are playing it cool, but Bitfinex analysts warn this might be the quiet before chaos erupts. Meanwhile, altcoins are getting the cold shoulder, with Bitcoin dominance flexing at 60%.

Major crypto players unite to launch USDG stablecoin, offering unique yield-sharing model to challenge USDT and USDC dominance

Here comes a fresh challenger in the stablecoin arena. Paxos is rolling out USDG with an all-star crypto lineup including Robinhood, Kraken, and Galaxy Digital. The twist? This Singapore-based stablecoin's sharing 97% of its treasury yields with network participants. DBS Bank's backing adds serious street cred to this USDT/USDC competitor.

Mt. Gox awakens with massive $2.2B Bitcoin transfer, sparking speculation about imminent creditor repayments

The ghost of crypto past just made some serious waves. Mt. Gox, the OG exchange that went down in flames back in 2014, just moved a whopping 32,371 BTC ($2.2B) to unmarked wallets. Coming hot on the heels of a smaller 500 BTC transfer, this could signal movement on those long-awaited creditor repayments – though they've kicked the deadline to October 2025.

A Polymarket "whale" identified as “larpas” sold $4 million in Trump victory-related bets, reacting to uncertainty ahead of the November 5 U.S. election

The sell-off began shortly after trader GCR advised caution, impacting Trump’s odds on Polymarket, which dropped from 60.6% to 56.2% before partially rebounding to 58%. Data from 17 election prediction models shows Trump leading in 14, though his odds dipped in nine venues.

GOLD

Citi analysts suggest that gold could see a post-election sell-off if Trump wins, as his pro-equity policies may shift investor focus away from gold

Historically, gold has tended to dip after U.S. elections, including an 8.2% drop after Trump’s 2016 victory. However, Citi remains bullish long-term, forecasting a rise to $3,000 per ounce within six months due to a weakening U.S. labor market and increasing ETF demand.

DAILY ECONOMIC CALENDAR (ET)

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