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SINGAPORE: Stock markets moved sideways and an uneasy calm settled over currencies and bonds as investors waited for the United States to choose a new leader with polls showing the contest on a knife edge.

Oil held sharp overnight gains on delays to producers’ plans for increased output, leaving benchmark Brent crude futures at $75.08 a barrel after a 3% rise on Monday.

MSCI’s broadest index of Asia-Pacific shares outside Japan was flat.

Tokyo’s Nikkei returned from a holiday and rose 1.3% in morning trade.

S&P 500 futures ticked 0.1% higher.

The dollar, which had eased overnight as traders made final adjustments to positions, bought 152.35 yen and traded at $1.0875 per euro.

“They’ve priced what they think is price-able and that’s that,” said Westpac strategist Imre Speizer, adding that a clear win for Republican Donald Trump would lift the dollar, while a win for Democrat Kamala Harris would push it a little lower.

Election day ends an acrimonious campaign jolted by assassination attempts on Trump and the withdrawal of President Joe Biden in favour of Harris, with polls showing the candidates virtually tied.

Markets are on edge about how Trump’s protectionist trade policies in particular could stoke inflation and hit exports in the world’s biggest consumer market with bonds and the dollar expected to move on the outcome of the election.

“Ultimately the US election comes down to this - whether the US electorate wants to vote for economic policy continuity, institutional stability and liberal democracy (Harris) or radical trade policy, a further retreat for globalization and strongman democracy (Trump),” J.P. Morgan analysts said in a note.

Asian markets rise ahead of US election, Chinese stimulus meeting

“In short, a vote for stability or change.” BRACED China is seen on the front line of tariff risk and the currency in particular is trading on tenterhooks with implied volatility against the dollar at record highs.

The yuan hovered at 7.1065 per dollar, while broader foreign exchange markets were steady.

Traders kept one eye on a Reserve Bank of Australia rate decision, due at 0330 GMT, though no policy change is expected and most are keeping to the sidelines in order to trade quickly on election results.

The Australian dollar held at $0.6590.

“Simply, if Harris wins, we like selling dollar/yen and buying AUDUSD,” said currency strategists at Citi.

“If Trump wins, we like buying USD against EUR, SEK, and NOK.”

Treasury markets, which have also priced in a US interest rate cut for Thursday, held their ground in Asia with 10-year US yields at 4.30%.

Bitcoin, which is seen as a beneficiary of a softer regulatory environment should Trump win office, has sold from recent highs and was steady at $67,924 on Tuesday.

When results roll in after midnight GMT the focus will be on battleground states of Georgia, North Carolina, Pennsylvania, Michigan, Arizona, Wisconsin and Nevada.

A winner may not be known for days and Trump has signalled that he will attempt to fight any defeat, as he did in 2020.

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