The first day of the week kicked off with a good amount of drama. The US Democratic candidate Hillary Clinton received an unexpected boost to her campaign with just hours left before the Presidential election as the Federal Bureau of Investigation (FBI) announced that they once again exonerated her in email gate. This provided the Democrat nominee’s campaign a new momentum as the US heads to the polls tomorrow. Meanwhile, British Prime Minister, Theresa May has embarked on a 3-day visit to India with an aim to enhance Indo-UK ties in the key areas of trade, investment, defence and security.

This week, the market trajectory will be determined by the outcome of Tuesday's Presidential elections, where Hillary Clinton, the market favourite, is struggling to command a decisive lead over Republican nominee, Donald Trump in the final days of campaign.

Pound Sterling – UK Markets

The Pound is trading on a weaker footing against its major peers this morning. The domestic currency was already rattled during the weekend, given the backdrop of rising political acrimony in the UK. The British Prime Minister (PM), Theresa May, drew new Brexit battle lines as she warned critics not to thwart her timetable for withdrawal from the European Union. Last week, UK’s High Court (HC) had ruled that the Article 50 of the Lisbon treaty could not be invoked without first consulting the Parliament. The British PM further insisted that the government has a strong case to persuade UK Supreme Court judges to overturn the HC’s decision.

On the data front, the just out data showed that Britain’s Halifax house prices unexpectedly rose for October. Although Sterling reacted less to economic data releases last week and was mostly influenced by political news, this week the Pound will most likely reawaken to eco-stats. Data points such as UK’s industrial production, NIESR GDP estimate and goods trade balance are up for release this week.

US Dollar – US Markets

On Friday, a string of data in the US painted a mixed picture of the economy, while investors remained cautious ahead of the outcome of upcoming presidential election. Data indicated that the US economy added less than forecasted jobs in October from September. In other economic news, unemployment rate in the US declined in October, in line with market expectation. Meanwhile, the nation’s labour market continues to show signs of gradual strengthening. Additionally, US trade deficit narrowed more than estimated in September, due to an increase in goods and services exports, continuing with the encouraging trend that started in June 2016.

The greenback is trading in positive territory against the Pound and the shared currency this morning, after the FBI yet again cleared Hillary Clinton in the email server case. Later today, market participants will keenly watch US labour market condition index and consumer credit change for further cues in the US Dollar.

Euro – European Markets

The Euro’s bullish momentum against the greenback has stalled at the start of the new week, as the US Dollar gained ground after the FBI cleared Democratic nominee, Hillary Clinton’s email cases. The sentiment towards the US dollar picked-up pace this morning, after reports hit the wires that the FBI brushed aside Clinton’s email fiasco as more of carelessness than criminality. This once again lifted the odds for a Clinton win. On the domestic data front, the just released Eurozone’s Sentix investor confidence index blew past investor expectations in November. Separately, German construction PMI registered an increase for October. On the other hand, the nation’s seasonally adjusted factory orders surprisingly declined in September. Going ahead, investors await the Eurozone’s retail sales data, scheduled to release in some time and is expected to decline further in September.

On Friday, data showed that the Euro zone’s producer prices rebounded above expectations in September. Meanwhile, the annual drop in prices slowed during the same month and recorded its lowest rate of decline for this year.

Other Currencies – Highlights

The Japanese Yen is trading lower against the US Dollar this morning. Earlier in the session, the Bank of Japan (BoJ) released the minutes of its September monetary policy meeting. It showed that policymakers believed the country’s economic recovery was continuing at a satisfactory pace. Further, most of the nine board members were of the view that it could take time for the central bank’s monetary policy to heighten inflation expectations. At this meeting, the BoJ switched its policy target to interest rate targeting from quantitative easing, after years of asset purchases failed to jolt the economy out of stagnation.

Japanese policymakers originally hoped aggressive monetary easing and fiscal spending would spur economic growth in the nation, which would in turn push up real wages and spark inflation. Thus, in a glimmer of hope, Japan’s real wages rose more than expected in September, climbing for the eighth consecutive month, with the economy showing scant signs of generating inflation. Moreover, the wage earners’ nominal cash earnings advanced in line with expectations during the same month.