* Markets Re-Pricing Clinton Win - Over the past 24 hours, it appears as though markets are getting ahead of election results and are pricing in a Clinton victory. Clinton-Trump spread began to widen again to +2.9 overnight (vs. low of 1.3 on 3 Nov).

    US Presidential Election – In Less Than 24 Hours

      Markets Re-Pricing Clinton Win - Over the past 24 hours, it appears as though markets are getting ahead of election results and are pricing in a Clinton victory.  Clinton-Trump spread began to widen again to +2.9 overnight (vs. low of 1.3 on 3 Nov).  Trump hedges such as long JPY, CHF and EUR were unwound while risk sentiment has turned positive – US equities were up over 2% overnight. Even MXN, AUD and NZD are rallying ahead of election results which are only due on 9 Nov (SG/KL time zone). We caution against complacency.

      Bulk of the Projection Should Start Coming in After 9am SG/KL Time (9 Nov) - As of writing, Clinton has won the Dixville Notch midnight vote. But polling stations in other parts of US are only due to open in the east coast states at 7pm (SG/KL time 8 Nov). The first polls are expected to close in Indiana and Kentucky at about 7am (SG/KL time on 9 Nov). These 2 are traditionally Republican states. Focus will be at about 8am – 830am SG/KL time 9 Nov) where swing states, Florida, Ohio, Virginia, North Carolina, Georgia, New Hampshire are expected to release projections based on exit polls. These swing states carry a total of 95 electoral votes (out of 270 electoral votes). The bulk of the projections based on exit polls should start coming from 9am (SG/KL time 9 Nov). The earliest possible time that the US TV network will ‘call’ for either candidate is at about 12 noon (SG/KL time 9 Nov). This is also the time polls close in California.

      Base Case: Clinton Wins and Republicans Take Congress - We are no predictor of election outcome. What we had done was to look at various scenarios (as per previous report). Our base case scenario remains for Clinton win and Senate to remain under control of Republicans. This should see short term relief rally for risk proxies including AXJs (such as KRW, PHP, THB) and MXN while Trump hedges should be further unwound. We favor long AUDJPY, NZDJPY, USDJPY, and AUDSGD. We are biased to buy USDSGD, USDCNH on dips.