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Hong Kong - Investors are becoming more jittery amid a tightening race for the US presidency, sending gold higher for a sixth day while weighing on equities and the Mexican peso.
Bullion climbed to a one-month high, US equity index futures fell and Asia ex-Japan stocks held near their lowest level since September after Fox News reported that a Federal Bureau of Investigation probe involving Democratic nominee Hillary Clinton was intensifying.
The peso slid versus all of its major peers on concern Mexican exports will suffer if she loses. Bloomberg’s dollar index dropped for a fifth day amid speculation the election’s fallout could kill off any prospect of the Federal Reserve raising interest rates next month.
Investors turned more risk averse over the past week as voter surveys suggested Clinton’s once dominant lead over Donald Trump was faltering ahead of the November 8 election.
Poll aggregator FiveThirtyEight gives her a 68% chance of victory, 14 percentage points less than it estimated prior to a Friday announcement that the FBI had reopened a probe into her use of an unauthorized email server while Secretary of State.
Bets on a December interest-rate hike by the Fed were stepped up on Wednesday at the central bank left policy unchanged and signaled a December move was likely.
“US political uncertainty ahead of next week’s election is weighing on markets,” said Elias Haddad, a senior currency strategist at Commonwealth Bank of Australia in Sydney.
“Most polls suggest the presidential election is turning out to be a closer call now compared to a few days ago following the controversy about Hillary Clinton’s email investigation. In the short term, this should weigh on the dollar particularly versus the yen and euro.”
The FBI’s investigation into Clinton has taken on a very high priority, Fox News reported, citing unidentified sources. She led Trump 39% to 35% among independents surveyed onm Friday through Monday, the latest Purple Slice online poll for Bloomberg Politics showed.
Commodities
Gold climbed 0.4% to more than $1 300 an ounce as of 07:44, extending its longest winning streak since September.
“Gold was stronger on the back of safe-haven buying as opinion polls on the US election continued to show Trump gaining,” Australia & New Zealand Banking. said in a note. “Weak equity markets also helped improve investor appetite."
Copper declined 0.3 percent in London and aluminum extended Wednesday’s retreat from its highest level since June 2015.
Crude oil advanced 1% to $45.78 a barrel. It tumbled 2.9% in the last session as data showed US inventories rose by 14.4 million barrels last week, the biggest gain in data going back to 1982 and more than the 2 million barrel increase forecast in a Bloomberg survey. Record OPEC output last month is also damping the outlook for oil, complicating the group’s effort to stabilize prices.
Stocks
Futures on the S&P 500 Index fell 0.2% following a seventh day of losses in the US benchmark, its longest selloff since November 2011. Nasdaq 100 Index contracts declined 0.4% after Facebook Inc. slid in extended New York trading after reporting earnings. The social network predicted an uptick in costs and a slowdown in advertising sales growth.
About five shares declined for every four that rose on the MSCI Asia Pacific excluding Japan Index, which was little changed after sliding 1.4% in the last session. New Zealand’s benchmark stock gauge entered a correction, while Hong Kong’s Hang Seng Index held near its lowest level since August. Japanese markets were shut for a holiday.
“The move to take risk off the table continues,” Chris Weston, chief market strategist in Melbourne at IG, said in an email to clients.
“We have reached a point where there is a buyers strike, where money managers have reduced their risk, increased cash allocations within the portfolio and are happy to ride out this mini-storm of uncertainty. This is a perfect breeding ground for short sellers who love the combination of uncertainty and lack of bids.”
Wynn Macau slumped more than 4% in Hong Kong after reporting a profit that trailed analysts’ estimates, while Hong Kong Exchanges & Clearing retreated after posting a 34% drop in earnings.
Currencies
The Bloomberg Dollar Spot Index, which tracks the currency against 10 major peers, fell 0.2%. The yen strengthened as much as 0.7% to a one-month high and South Korea’s won rebounded 0.9% from near to a three-month low. A JPMorgan index of global currency volatility held at a seven-week high.
“The market’s concerned that the FBI investigation will swing next week’s election,” said Mansoor Mohi-uddin, a Singapore-based strategist at Royal Bank of Scotland.
The Fed left rates on hold for a seventh consecutive meeting Wednesday and said in its statement it only needed “some” further evidence that inflation and employment were on track toward their goals before raising them. Futures contracts show a 78% likelihood of an increase in December, compared with 68% on Tuesday.
Mexico’s peso fell as much as 0.8% to its weakest level since September, reversing an earlier advance. The currency tends to fall when Trump’s prospects election prospects improve because he has pledged to revisit the North American Free Trade Agreement that governs commerce between the US and Mexico.
The pound added 0.2% before the Bank of England announces the outcome of a monetary policy review and updates its inflation projections. A 17% tumble in the pound since Britain’s June vote to leave the European Union has stoked expectations that consumer-price gains will accelerate.
Bonds
Australia’s 10-year bond yield fell four basis points to a one-week low of 2.30%. New Zealand’s declined by two basis points to 2.75%.
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