Asian shares wobbled, supported by Wall Street gains although sentiment was tempered ahead of the U.S. midterm elections, the first major electoral test of President Donald Trump’s big tax cuts and hostile trade policies.
Ahead of Tuesday’s U.S. elections, investors generally expect opposition Democrats to take over the House of Representatives while Trump’s Republican Party is tipped to retain the Senate. While political gridlock between the White House and Congress could hinder Trump’s pro-business agenda and raise political instability, including hearings centring on the administration, some analysts say such an outcome may have already been priced in by investors. Trump said last month his administration planned to produce a resolution calling for a 10 percent tax cut for middle-income households. Many investors also expect Trump to continue to take a hard line on trade, regardless of the outcome of the elections.
In energy markets crude prices wobbled near multi-month lows after the United States granted eight countries temporary waivers allowing them to continue buying oil from Iran as Washington formally imposed punitive sanctions on the Islamic republic. West Texas Intermediate (WTI) crude (futures slipped 0.3 percent to 62.86 a barrel after hitting a seven-month low of 62.52. Brent crude futures dropped 0.3 percent to 72.93 a barrel, near Friday’s 2 1/2-month low of 72.16. Both oil benchmarks have slid more than 15 percent since hitting four-year highs in early October.
Gold prices inched lower while the dollar traded slightly higher ahead of the U.S. midterm elections due later in the day, as analysts expected a Republican victory would boost the dollar but hurt commodities. Gold prices were little changed, trading near 1232.