Key points:

Biden declared winner of US election

Kanye has conceded, Donald hasn’t

Markets calm into the weekend but risk expected to rally

The election result has been called as expected with a Biden win however Trump refuses to concede or go quietly, also as expected. Legal proceedings against a number of states surrounding the late vote counts continue but have largely been dismissed by judges as having no basis. It’s unlikely that the Supreme Court will be involved as these are State issues and not a Federal issue. Markets have opened rather sanguinely this morning in NZ with currencies only very slightly higher against the greenback. Indices futures haven’t opened yet but it’s likely we will see some risk on flows to continue from last week. Friday was a bit of a pause and some profit taking booked as we awaited the outcome and what Trump’s approach will be. We also had the US NFP report for October at 638K from 580K expected. A good beat but with most of America outside of lockdown there’s still a huge number of jobs that have not returned to normal. Brexit talks continued causing some volatility to GBP and its likely this vein will continue as we near crunch time. EU’s Barnier has been out this morning with comments about ‘work continues’. It certainly does. When the UK voted, Joe Biden was Vice President! China released trade data over the weekend with a strong jump to 11.4% for exports from 9.2% expected. The offshore CNH has jumped higher this morning on the open in thin liquidity to a two year high. This in turn should boost the commodity currencies and we’re seeing some early strength in AUD up 25 pips from the close on Friday. Fed speakers will be hitting the wires this week but expect the theme to remain that fiscal stimulus will be required sooner rather than later. The US Senate still has a chance of going to the Democrats when there are votes in early January to be counted from the state of Georgia. A clean sweep would see stocks soar higher with the expectation that the party will have total control and will be able to push through legislation easier. BoE’s Bailey & Haldane will be speaking later during the European session but there’s no data to excite today with the US election fallout likely to dominate price action.

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