Global equity markets rose and safe-haven assets including the dollar were mixed on Wednesday as investors weighed a rising number of COVID-19 cases and a chaotic U.S. presidential debate against better-than-expected U.S. private jobs data on the last day of a turbulent quarter.
Republican President Donald Trump and Democratic rival Joe Biden battled over Trump's record on the coronavirus pandemic, healthcare and the economy in a bad-tempered first debate on Tuesday night marked by personal insults and Trump's repeated interruptions of Biden.
"The only point worth mentioning is that the debate may have increased expectations for a contested election result," said UBS chief economist Paul Donovan. "Given the importance of international investors to U.S. markets, this may add volatility around the election."
MSCI's gauge of stocks across the globe <.MIWD00000PUS> gained 0.43% following modest gains in Europe and mixed trading in Asia.
On Wall Street, the Dow Jones Industrial Average <.DJI> rose 329.04 points, or 1.2%, to 27,781.7, the S&P 500 <.SPX> gained 27.53 points, or 0.83%, to 3,363 and the Nasdaq Composite <.IXIC> added 82.26 points, or 0.74%, to 11,167.51.
Better-than-expected gains in ADP's survey of private payrolls helped push U.S. equities higher.
"The election is not the primary driver of markets right now - the level of economic reopening is," said David Bahnsen, chief investment officer at the Bahnsen Group.
MSCI's broadest index of world shares, which tracks nearly 50 countries <.MIWD00000PUS>, lost 3.4 in September, its first monthly loss since equities plummeted in March as much of the global economy was frozen in response to the pandemic. The index closed the quarter with a 7.7% gain.
Oil <LCOc1> dropped approximately 10% for the month, while gold's <XAU=> 4.1% drop was its worst month since late 2016.
As the Nov. 3 U.S. election draws closer, investors are increasingly expecting a bumpy final lap and are bracing for the possibility that the result will be unclear on Election Day.
Options trade points to a volatile November. Two-month dollar/yen volatility <JPY2MO=>, a gauge of expected moves in the yen, is elevated, and its premium over one-month volatility <JPY1MO=> is near record levels.
In the closing stages of Tuesday night's debate, Biden said he would accept defeat if he lost at the ballot box and would not claim victory prematurely.
Trump, who has refused to commit to a peaceful transfer of power if he loses the election, repeated unfounded allegations that mail-in voting would lead to fraud.
"I don't think we were expecting anything else from Trump," said Chris Weston, head of research at Melbourne brokerage Pepperstone. "He continues to put that contested (result) risk premium back into the market."
Benchmark 10-year notes <US10YT=RR> fell 12/32 in price to yield 0.6824%, from 0.645% late on Tuesday.
Oil prices were mixed as a rising number of coronavirus cases weighed on demand. [O/R]
U.S. crude <CLc1> rose 1.55% to $39.90 per barrel and Brent <LCOc1> was at $40.95, down 0.19% on the day.
(Reporting by David Randall; Editing by Will Dunham, Steve Orlofsky, Jonathan Oatis and Hugh Lawson)
