• The winner of the US Presidential Election has still yet to be declared, although Democrat Candidate Biden currently leads in electoral votes
• Fox News tallies President Trump at 214 vs. Biden at 264, while CNN tallies President Trump at 213 vs. Biden at 253
• The race has also been complicated by the threat of legal action with the Trump campaign reportedly considering legal action in several states
• Asian equity markets were higher across the board as the region took impetus from global peers including the tech-led rally on Wall Street
• The DXY traded sideways beneath 93.50 as participants await the winner of the US election and with the FOMC looming on the horizon
• Looking ahead highlights include, German Industrial Orders, EZ Retail Sales, Fed, BoE & Norges Bank Rate Decisions, Fed Chair Powell, ECB's Schnabel, de Guindos & Weidmann, supply from Spain & France
• Earnings: Commerzbank, Natixis, CNH Industrial, UniCredit, Dialog Semi, Leonardo, Lufthansa, Lanxess, ArcelorMittal, Societe Generale, AstraZeneca, T-Mobile, Alibaba, General Motors, Uber

US ELECTION UPDATE

The winner of the US Presidential Election has still yet to be declared, although Democrat Candidate Biden leads in electoral votes with Fox News tallies President Trump at 214 vs. Biden at 264 (include Michigan), while CNN tallies President Trump at 213 vs. Biden at 253, with close races in several key states remaining to be called including Georgia (16 votes), Pennsylvania (20 votes), Arizona (11 votes), North Carolina (15 votes) and Nevada (6 votes). The race has also been complicated by the threat of legal action with the Trump campaign reportedly considering legal action in Arizona and Nevada, while they also filed a suit in Georgia to require all the state's counties to separate all late-arriving ballots and sought to challenge late-arriving Pennsylvania ballots prompting the Supreme Court to instruct Democrats to respond by 1000GMT/0500EST. The Trump campaign said it will immediately request a recount in Wisconsin after the margin between the 2 candidates was less than 1ppt and a Wisconsin election official separately commented that results will be certified on December 1st, although the Wisconsin Attorney General suggested the Trump campaign may not proceed with a recount and that there was basically a zero chance of an election result change. (Newswires/MSNBC)

Democrat Presidential Candidate Biden said it is clear that he is winning enough states to win the Presidency but not declaring that he has won until votes have been counted, while he stated that every vote must be counted and he is confident he will emerge victorious. (Newswires)

NBC projected are Democrats to end up with 227 seats in the House with a margin of error of +/- 8 seats (currently have 203 vs Republicans with 188; 218 needed to hold control), while AP tallied Republican Party currently has 48 Senate seats, Democrats at 46 seats, other parties at 2 seats with 4 to still be called.

CORONAVIRUS UPDATE

AFP tweeted US COVID-19 cases hit a new daily record topping 99k cases citing Johns Hopkins, while a major newswire tally noted that US cases rose by at least 104,970 which was its highest single day increase. (Newswires)

UK COVID cases +25,177 (prev. +20,018) and deaths +492 (prev. +397). (Newswires)

Italy PM Conte announced to impose intermediate new COVID-19 restrictions in Puglia and Sicily region, while the toughest new restrictions will be placed on Calabria, Lombardy, Piedmont and Valle D’Acosta. Furthermore, the government stated stricter measures to help contain the coronavirus will take effect from Friday and it will approve new stimulus measures next week. (Newswires)

AstraZeneca (AZN LN) reportedly fell short of its target to deliver 30mln doses of its COVID-19 vaccine to the UK by the end of September and will only be able to supply only 4% of what it promised by year end, according to reports citing the head of government vaccine taskforce. (FT)

ASIA

Asian equity markets were higher across the board as the region took impetus from global peers including the tech-led rally on Wall Street as further election results trickled in and although the presidency still hangs in the balance with several key states still to be declared, betting markets have Biden as a heavy favourite and Fox News also tallies him as just 6 electoral votes shy of a victory at 264 vs. 214 for President Trump. Meanwhile, prospects of a Blue Sweep diminished which underpinned tech and defensives stateside. ASX 200 (+1.3%) was led higher by tech and healthcare with financials also buoyed after NAB topped forecasts for FY cash profit despite declining 37% Y/Y, although upside in the index was capped by weakness in the commodity sectors and ongoing souring of ties with China which saw Treasury Wine Estates slump on news China may impose anti-dumping duties of more than 200% on wine imports from Australia. Nikkei 225 (+2.0%) was also buoyed and rose above the 24k level to print its highest level since January, while Hang Seng (+2.6%) and Shanghai Comp. (+1.0%) moved higher in tandem with the rising tide across global stocks and despite a liquidity drain by the PBoC, as it also announced to conduct a Medium-term Lending Facility on November 16th with the amount to be determined by market demand. Finally, 10yr JGBs traded positive as they tracked upside in T-notes and following a break of the psychological 152.00 level, while the BoJ were also present in the market today in which it upped purchase amounts in 1-3yr and 3-5yr maturities as it had previously flagged.

PBoC injected CNY 30bln via 7-day reverse repos for a net daily drain of CNY 110bln, while it is to conduct a Medium-term Lending Facility operation on November 16th with the amount to be determined by market demand. (Newswires) PBoC set USD/CNY mid-point at 6.6895 vs. Exp. 6.6933 (Prev. 6.6771)

HKEX (388 HK) said it will introduce futures and options contracts based on the Hang Seng Tech index on November 23rd and January 18th respectively. (Newswires)

UK/EU

BoE plans to announce QE of GBP 150bln vs. Exp. GBP 100bln on Thursday and can go as high as GBP 200bln, according to reports in The Sun citing sources. (The Sun/Telegraph)

UK Chancellor Sunak is expected to confirm that furloughed workers will get 80% of their wages as long as their businesses have been mandated to shut. (Telegraph)

UK Brexit Negotiator Frost said progress was made, but he agrees wide divergences remain on some core issues and that the two sides continue to work to find solutions that fully respect UK sovereignty. (Newswires) EU Brexit Negotiator Barnier reportedly gave a very downbeat briefing to EU ambassadors on negotiations and while there was progress on police and judicial cooperation, there has been no progress at all on LPF, fisheries and governance. Furthermore, Barnier is said to have told diplomats that next week will therefore be "decisive" and that if there is no progress on the key issues we will be in a serious situation. (RTE)

EU diplomat noted a no-deal outcome still cannot be excluded given the situation, while reports added it is up to UK PM Johnson whether and how he wishes to move forward when Brexit talks recommence, with the next few days critical as both sides reflect whether they wanted a deal and what compromises are necessary. (FT)

UK source said the US election isn’t relevant to the Brexit deal being negotiated or the chances of it happening, unless Brussels is foolish enough to delay things because they think Biden will somehow change things. (BBC)

FX

In FX markets, the DXY traded sideways beneath the 93.50 level with the USD contained as participants continued to await the winner of the US election and with the FOMC looming on the horizon. The greenback’s major counterparts were mixed with EUR/USD steady after ECB officials reiterated the likelihood that new measures could be implemented in December and GBP/USD was pressured after source reports suggested the BoE could overdeliver on QE with GBP 150bln or more in today’s policy announcement at 0700GMT. Furthermore, UK lawmakers voted to go into a lockdown from today as expected and recent Brexit talks have provided little comfort with EU Brexit Negotiator Barnier said to note that while there was progress on police and judicial cooperation, there has been no progress at all on the level playing field, fisheries and governance. Elsewhere, USD/JPY remained dispirited following the recent pullback from the 105.00 level and antipodeans were rangebound with AUD/USD marginally weaker amid mixed trade data and after it was recently stalled by resistance at the 0.7200 handle.

Australian Trade Balance (AUD)(Aug) 5.6B vs. Exp. 4.5B (Prev. 4.6B). (Newswires) Australian Exports (Sep) M/M 4% (Prev. -4%) Australian Imports (Sep) M/M -6% (Prev. 2%)

COMMODITIES

Commodities were lacklustre overnight with underperformance in oil prices as the reduced prospects of a Blue Sweep could result to a lower amount of stimulus and with record number of daily US coronavirus infections also weighing on the demand outlook which dragged WTI crude futures beneath USD 39/bbl but with losses stemmed by the broad constructive risk tone. Elsewhere, gold oscillated through the USD 1900/oz level with a non-committal tone seen amid a subdued greenback and tentativeness as participants still await the final result of the US election and looming FOMC, while copper traded sideways as the positive risk tone provided a base for prices near this week’s highs above the USD 3.1/lb level.

US

Treasuries were ultimately firmly bid on Wednesday as Congress now looks set to be a divided one, greatly hampering expectations of the unfettered fiscal largesse that accompanied the Blue Sweep consensus view. Overnight, the TPLEX had been extending on its steepener as results from the elections started to feed through; 10s and 30s hit highs of 92bps and 172bps respectively. However, as Florida fell into Trump’s hands and the Dems failed to flip as many seats in the Senate as they had expected, traders soon pulled back on the steepeners and lifted the offers on duration; 10s and 30s hit lows of 75.6bps and 150.6bps respectively. A key narrative behind the past few weeks’ curve steepening has been the expected Blue Sweep and the multi-trillion-dollar stimulus packages that would follow suit, which would theoretically catalyse the economic recovery out of the crisis, as well as the inflationary landscape (its little surprise that inflation breakevens fell significantly today as real yields were relatively static). Now any stimulus package has to become bipartisan to some degree (at least to get enough votes), although analysts still see room for USD 1trln under a divided Congress (McConnel sounded more open to compromise today) which Treasury bulls should be wary of. Elsewhere, somewhat overshadowed, the Treasury made its quarterly refunding announcement, where it raised its auction sizes for the Nov-Jan quarter but did so at a slower pace than at the last announcement (54bln of 3s, 41bln of 10s, and 27bln of 30s all to be auctioned next week); it noted its auction sizes were reflective of expectations for an additional stimulus package of USD 1trln. T-note (Z0) futures settled 28+ ticks higher at 138-31+.

Fed's Daly will vote at the FOMC instead of Minneapolis Fed's Kashkari, according to a Fed official. (Newswires)