European markets opened in the red this morning, alongside US Futures, as investors’ risk appetite is being shattered by the narrow results of the US presidential election. This is the worst scenario for investors as the close battle between the two candidates is likely to lead to contested results, with Donald Trump already saying he would go to the Supreme Court in the case of a Biden win, as well as a less legitimate President. In addition, investors expect the current uncertainty to weigh on markets for a bit of time, maybe days, as many states still have to count votes sent by mail prior to the election day.
Finally, other strong market drivers will continue to add to the current uncertain trading stance with a slew of US data due out today before tomorrow’s policy decision from the Fed and Friday’s US NFP. Having said that, no clear directional trend is expected for the end of the week, but these major drivers are likely to exacerbate market volatility on a very short-term basis.
