Market Wrap – Election deadlock remains

Financial markets are trading in the red on Wednesday as the deadlock in the US midterm election basically been no clear winner right now.

Republicans and Democrats are in a very tight race for control of the US Congress, as counting continues following the midterm elections.

Most financial market pundits would favour a red win, however, it is very close. But still, Republicans are favoured to win the House of Representatives.

The fight for the Senate is on a knife-edge, and this why we are seeing red shoots today and some minor strength in the greenback as treasury yields recede.

Earlier today Democrats gained a key Senate seat in Pennsylvania and the results of several other close races are yet to be called.

Currently exit polls suggest the economy and inflation were the biggest concerns for voters. The US CPI report for October is scheduled tomorrow and it remains the last big event on the economic docket.

Look at the US Congress it is made up of two parts, the House of Representatives and the Senate. All 435 seats in the House of Representatives and 34 of the 100 seats in the Senate were up for grabs.

Basically, Members of the House represent their local populations and Senators represent the interests of their states. If Democrats lose control of either the House or the Senate, Republican can block the current administrations plans. Financial markets know this.

Former president Donald Trump, who is expected to announce he will run for president in 2024, has seen some of his endorsed candidates fail. This could lead to a tighter race with Ron Desantos for the 2024 leadership of the Republican Party.