by Claude Chendjou

PARIS (Reuters) – The main European stock markets are expected to be on a cautious note on Tuesday in the light of the American presidential election which promises to be particularly close according to opinion polls.

According to the first available indications, the Parisian CAC 40 should gain 0.11% at opening. The Dax in Frankfurt could nibble 0.04%, while the FTSE 100 in London is expected to drop 0.15%. The EuroStoxx 50 index is expected to be stable and the Stoxx 600 should gain 0.02%.

Americans are going to the polls this Tuesday to mainly decide between Kamala Harris, Democratic candidate, and Donald Trump, her Republican rival, while millions of voters have already voted by mail. Opinion polls show a historically tight race and both campaigns say they are unsure who will win in the seven states that could determine the outcome of the vote.

This uncertainty should push market operators to be cautious. Analysts say Donald Trump’s policies on immigration, tax cuts and tariffs could put upward pressure on inflation, bond yields and the dollar, while Kamala Harris’ policies are seen as a continuation of the mandate of Joe Biden, the current American president.

In addition to American political risk, investors must also take into account indicators of services activity in October in the United States and the United Kingdom, as well as numerous company results in Europe.

A WALL STREET

The New York Stock Exchange ended down on Monday for its last session before the American presidential election of capital importance for the country’s economy but also for world trade.

The Dow Jones index fell 0.61%, or 257.59 points, to 41,794.60 points. The broader Standard & Poor’s 500 lost 16.11 points, or -0.28% to 5,712.69 points. The Nasdaq Composite fell 59.93 points, or -0.33% to 18,179.984 points.

In terms of values, Tesla, whose sales in China fell by 5.3% year-on-year in October, according to data from the China Passenger Car Association published on Monday, fell by 2.46%.

IN ASIA

On the Tokyo Stock Exchange, the Nikkei index ended with a gain of 1.11% to 38,474.9 points, after a long weekend due to a public holiday. It rebounded after a sharp decline on Friday. The broader Topix gained 0.76% to 2,664.26 points.

In China, the Shanghai SSE Composite rose 2.32% and the CSI 300 rose 2.53%. The indexes were supported by signs of improvement in the Chinese economy. The Caixin survey shows that service sector activity in China accelerated in October to its fastest pace in three months.

VALUES TO FOLLOW IN EUROPE:

CHANGES

The dollar is on the defensive on Tuesday, as traders have adjusted their positions in view of the US presidential election, with a victory for Donald Trump no longer certain.

The dollar index fell 0.13% against a basket of reference currencies, after falling to 103.67 points on Monday for the first time since October 21.

The euro advanced 0.11%, to $1.0889, while the pound sterling traded at $1.2977 (+0.15%).

RATE

The yield on ten-year US Treasury bonds fell by 1.4 basis points, to 4.2949%, after a decline of 6.6 points the day before, its biggest daily drop in two months.

The yield on the German Bund of the same maturity increases by one basis point, to 2.401%.

OIL

The oil market is experiencing slight variations in the run-up to the American presidential election: Brent nibbles 0.05% to $75.12 per barrel and American light crude (West Texas Intermediate, WTI) gains 0.07%. at $71.52.

(Written by Claude Chendjou, edited by Blandine Hénault)

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