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The Guardian - UK
The Guardian - UK
Business
Graeme Wearden (now) and Nick Fletcher

Dow Jones surges by 371 points as Wall Streets bets on Clinton victory – as it happened

Trader Mark Puetzer working on the floor of the New York Stock Exchange today, as shares rallied
Trader Mark Puetzer working on the floor of the New York Stock Exchange today, as shares rallied Photograph: Richard Drew/AP

Closing post: Wall Street posts biggest jump since March

DING DING! Wall Street has just posted its best day since the start of March, as the closing bell brings today’s rally to a halt.

Predictions of a Hillary Clinton election victory have cheered the markets, ending a nine-day losing streak.

The Dow Jones industrial average jumped by 371 points, or 2.08%, with the S&P 500 gaining 2.1%. The tech stock-heavy Nasdaq index gained almost 2.5%, as investors piled back into shares.

The closing bell on Wall Street tonight
The closing bell on Wall Street tonight Photograph: Bloomberg TV

This followed a strong rally in Europe, where London’s FTSE 100 posted a triple-digit gain.

Chris Beauchamp of IG says we’ve seen a buying stampede today:

According to the IG binary market, IG clients think Hillary remains the favourite, with her chances of election holding at 81%.* US assets have been heavily bid throughout the day, as the nine-day selloff is banished to distant memory.

With around 36 hours to go until the result becomes known, there is plenty of potential for upsets however, and we may see the bullish move falter tomorrow if the battleground states remain in close contention.

As we’ve been covering in this blog since early morning, the FBI’s decision to clear Hillary Clinton over her email server has given the Democratic candidate a last-minute lift.

But.... this race is not over, even if some investors are acting like Clinton is home and dry. Key states such as Florida, North Caroline and Pennsylvania will determine who wins the White House.

And the word from the campaign trials is that the race is still tight. Here’s a flavour of our latest news story:

The US presidential campaign ended on Monday where the fiercest nomination battles began – in the rustbelt – as Hillary Clinton and Donald Trump spent the last hours of a bitter election focused on the country’s deep economic divide.

Democrats gained a late confidence boost as a final series of national opinion polls confirmed a small but steady lead for Clinton. Early voting numbers point already to record turnout among Latino voters stirred into action by Trump’s anti-immigration rhetoric.

But the continued risk of an upset that would send shockwaves around the world was underlined by state-level polling suggesting several possible paths to victory also remain for Trump. He hopes to galvanise white working-class anger over jobs and trade in the traditionally Democratic manufacturing regions, though also needs an almost clean sweep of battleground states including Florida and North Carolina to win outright.

Sensing possible danger, the Clinton campaign poured last-minute resources into the industrial midwest, a region where she struggled against a similar anti-establishment surge for Bernie Sanders during the primary election season. Both Clinton and Barack Obama held afternoon rallies in Michigan before planning to finish the night on stage together in Philadelphia with Bruce Springsteen....

Do stay tuned to our general election liveblog, and we’ll be back in the morning with more market action. Goodnight! GW

Updated

The Dow Jones industrial average is pushing even higher in the final few minutes of trading, and is now up 2%.....

I knew there was something important coming up. Thanks, AP!

Shares in shipping, logistics and transport companies are having a particularly good day, sending the Dow Jones Transportation Average up by 2.8% in late trading.

The index has gained 19% since January, which is significant as it’s often seen as a bellwether for the wider economy (companies don’t ship as much if they’re losing business).

Analysts reckon that the transport sector would do well under a Clinton or Trump presidency, as both have promised spending on infrastructure.

Marketwatch has more details.

The British pound continues to be buffeted by the sudden strength of the US dollar today.

Sterling has shed one cent, or 0.9%, today and is currently hovering around $1.24.

The dollar is up around 0.75% against a basket of currencies today, including the euro and the yen. That’s (yet) another sign that investors are pricing in a Clinton victory.

Specialist Frank Masiello, left, working at his post on the floor of the New York Stock Exchange today.
Specialist Frank Masiello, left, working at his post on the floor of the New York Stock Exchange today. Photograph: Richard Drew/AP

Constellation Brands, which imports beers such as Mexico’s Corona, has joined the Mexican Peso as a surprise proxy for Trump success.

Shares in Constellation have jumped by 4% today, having fallen pretty steadily through November.

Trump’s anti-Mexico rhetoric has worried many US firms who import from Mexico, as he has pledged to shake up trade links between the two countries.

Wall Street on track for a good day

Trader Thomas Ferrigno works on the floor of the New York Stock Exchange today.
Trader Thomas Ferrigno works on the floor of the New York Stock Exchange today. Photograph: Richard Drew/AP

With less than 90 minutes to go until the closing bell, Wall Street is still on a tear and on track for its best day’s trading since March.

Signs that Hillary Clinton has a better chance of winning tomorrow’s election are driving share higher, despite many polls suggesting she only has a narrow lead over Donald Trump.

Here’s the situation on the trading floors:

  • Dow Jones: up 335 points or 1.8% at 18,223
  • S&P 500: Up 43 points or 2% at 2,128
  • Nasdaq: Up 111 points or 2.4% at 4,771

With Clinton seen as the more status quo option, investors are aware that the markets could tumble if Donald Trump stages a surprise victory.

Jeff Carbone, co-founder of Cornerstone Financial Partners in Charlotte, North Carolina, says (via Reuters):

“I don’t see another 5 percent bump on a Clinton win, but I could see a 5 to 7 percent pullback on a Trump win.”

The gold price is continuing to slide today, as traders put their money into riskier assets.

Bullion is down 1.8% right now at $1,280 per ounce, down from $1,304 on Friday night.

Our colleagues in America are relentlessly live-blogging the final day of the campaign.

They’ve already covered of a speech by president Barack Obama, fears of voter suppression in North Carolina, and analysis of how often each candidate has fibbed during the campaign race....

Today’s stock market rally has added tens of billions of dollars to the wealth of the world’s richest people.

Bloomberg Billionaires Index, which tracks those with more money then they could possibly know what to do with, has jumped by 0.9% today to $4.4 trillion, a gain of $37bn.

Amazon’s founder, Jeff Bezos, gained $2.7bn, while Mexico’s richesst man, Carlos Slim, gained a far from slimline $2.2nbn.

Well done chaps. And now we know who’ll suffer if the markets have a meltdown on Wednesday.....

Stock markets could plunge by over 5% on Wednesday if Trump beats Clinton, according to Mitsubishi UFJ Financial Group’s Derek Halpenny.

He was speaking to Sky News a few minutes ago:

The S&P 500 index has jumped by 2% today, which puts it on track for its best one-day performance since March this year.

That would also reverse nine-days of losses, which accelerated after FBI chief James Comey sensationally revealed that the agency was investigating a new set of emails related to Hillary Clinton.

Updated

The oil price has also risen today, with the price of a barrel of New York light crude gaining 0.6% to $44.34.

The rally is partly due to Hillary Clinton’s improved prospects in the election, now that the FBI have cleared her of criminal wrongdoing over those emails.

Phil Flynn, analyst at Price Futures Group in Chicago, summed up the mood:

“There’s a little bit less of a concern about the economy falling apart.”

And here’s a reminder of why financial investors worldwide are wary of Trump:

Dow Jones index up almost 2%

Each of the 30 shares on the Dow Jones index has risen so far today, as investors pour money back into stocks.

United Healthcare is leading the rally, up 3.2%, followed by tech firms Microsoft and Intel, and banking giants JP Morgan and Goldman.

Supermarket titan WalMart is bringing up the rear, with a 0.4% gain.

And this has sent the Dow up by a chunky 350 points, or 1.96%.

The top and bottom-performing shares on the Dow Jones today
The top and bottom-performing shares on the Dow Jones today Photograph: Thomson Reuters

Although some pollsters say the election looks tight, New York traders are calculating that Hillary Clinton’s chances of victory have risen since the FBI cleared her over her email server last night.

And Clinton continues to be seen as a more attractive candidate by Wall Street than Donald Trump, given (among other things) his opposition to trade deals.

Komal Sri-Kumar, president of Sri-Kumar Global Strategies, explains (via Reuters)

“Clinton is a known quantity and investors hate uncertainty and they are very happy even if taxes were to go up ...

In the case of Trump, it is uncertain as to what he stands for.”

Updated

Volatility on Wall Street has fallen to its lowest level since the Brexit vote, in another sign that investors are more relaxed about the election.

European markets boosted as Clinton is cleared by FBI

One letter was all it took to send stock markets sharply higher. The news that FBI director James Comey had written to Congress to say Hillary Clinton had no case to answer over the latest batch of contentious emails boosted her chances against Donald Trump and sent investors scrabbling to buy shares. In Europe the final scores showed:

  • The FTSE 100 finished 113.64 points or 1.7% higher at 6806.90, its biggest one day rise since 2 September
  • Germany’s Dax jumped 1.93% to 10,456.95
  • France’s Cac closed 1.91% higher at 4461.21
  • Italy’s FTSE MIB rose 2.56% to 16,736.75
  • Spain’s Ibex ended up 1.45% at 8918.8
  • In Athens, the Greek market added 1.16% to 580.57

On Wall Street, the Dow Jones Industrial Average has surged 344 points or 1.93%.

Whoever wins the US election, the initial market reaction may not last long, according to Capital Economics’ Simon MacAdam. He said:

In our view, any relief at a Clinton win would be short-lived, as her victory is largely priced into markets. But even if Trump pulls off a surprise win, we do not expect any sell-off to last long.

Starting with the stock market, while we think there would be a further rally in US equities if Clinton were to win, we doubt they would strengthen significantly for two reasons. First, attention would once again focus on the prospects for tighter Fed policy. Second, we think the US dollar would strengthen.

The flip-side is that we don’t think the knock to US equities would last long if her rival were to emerge victorious. A Trump presidency would presumably mean monetary policy staying looser for longer, which would be positive for the stock market, all else equal. What’s more, we think the accompanying narrowing of interest rate differentials with other economies, in conjunction with capital outflows into safe-haven currencies such as the Swiss franc and Japanese yen, should see the US currency weaken against other “majors”, thereby providing further uplift to US equities by boosting the dollar value of overseas earnings.

As for the Treasury market, a Trump win should be positive due to investors’ expectations for a looser Fed policy outlook. Granted, relatively dovish Fed Chair Janet Yellen may resign if the Republican candidate wins the keys to the White House, which could arguably put the Fed on course for less dovish policy. But if she were to step down, it is by no means clear that (i) Trump would put forward a particularly hawkish candidate for her replacement, (ii) the – potentially Democrat-controlled – Senate would approve such a nominee, or (iii) the independence of the Federal Reserve would be brought into question in any case. A Democrat presidency, however, probably wouldn’t alter investors’ US rate expectations by much. If anything, it would increase the perceived likelihood of a resumption of Fed tightening in December, which would be negative for Treasuries.

And it is not just the presidential race which could have an impact. MacAdam said:

There are at least two other points to consider. First, the market impact could well be amplified or diluted by the outcome of the Congressional elections, no matter who wins. In particular, if Trump were to win the presidential race and the Republicans retain control of both Houses of Congress, then market reactions would probably be more significant that they would be if the Senate came under control of the Democrats, thereby enhancing the restraints on the domestic power of the president.

Second, if the presidential election result turns out to be extremely close and is contested, then a protracted period of uncertainty could weigh on equity markets, as was the case in 2000.

Back with the markets and on Wall Street, the Dow Jones Industrial Average has stabilised with a rise of around 260 points, while the FTSE 100, German Dax and French Cac are all around 1.5% higher. Connor Campbell, financial analyst at Spreadex, said:

Monday has proceeded in a way eerily similar to the scenes before the Brexit back in June. In the run-up to the referendum the markets saw a last minute surge as investors prepared to Britain to remain in the EU, only to suffer a shock when the votes were counted.

The market has a bit more time to steady itself before the results of the election are announced; as the US electorate head to the polls tomorrow it will be interesting to see whether investors opt for continued Clinton confidence, sensible stability, or a sharp turn Trump-wards.

And here, courtesy of Nomura, is a look at how the last four US elections played out (timings Eastern time):

The last four US elections
The last four US elections Photograph: Nomura

Former chairman of the US Federal Reserve Alan Greenspan - he of “irrational exhuberence” - is critical of both candidates in terms of their economic acumen:

Here are the biggest risers on Wall Street so far:

Wall Street risers
Wall Street risers Photograph: Thomson Reuters

Wall Street opens sharply higher

As expected, US markets are moving ahead now Hillary Clinton has been cleared by the FBI over her emails, improving her prospects a day before the election.

The Dow Jones Industrial Average is currently up 250 points while the S&P 500 has climbed 1.1% and the Nasdaq Composite is up 1.6%.

If you want to follow the last day of campaigning in the presidential election, our US blog has the coverage:

Just under half an hour until Wall Street opens, and the futures are predicting a sharp rise following the latest election news:

Wall Street futures
Wall Street futures Photograph: Bloomberg TV

And here’s a guide to which states report when:

Memories of June’s EU referendum are still quite raw in the City of London.

Investors vividly remember seeing the pound suffer an almighty slump on June 24th this year, falling from $1.50 to $1.36 in a single panic-driven session.

Could Trump vs Clinton offer a repeat performance? Not if the polls are right...but don’t forget that the Remain campaign held a clear lead as Brits cast their votes.

Naeem Aslam of Think Markets explains:

There is always an element of Deja Vue effect, which we had during Brexit. Right now, the base case for markets is that Clinton will win the election. This is the biggest worry for us and the possibility of surprise should not be undermined.

Donald Trump’s victory will not only bring the knee jerk reaction for the market, but we are also concerned about the geopolitical uncertainty. So far looking at the Mexican peso, it is very clear that traders are respecting the reliability of the US polls. The US polling has a much better track record predicting that who is in the lead and who will be in the Oval Office. There is huge money involved in this process and they pay attention to every grain in reflecting the results.

Bloomberg have also knocked up a cheat sheet showing how a Trump win would be bad for shares and the US dollar, but good for gold.

Analysts at Dutch bank ING say the US dollar will rally against the euro and the yen if Hillary Clinton wins the presidency, while the Mexican Peso would also surge.

But it’s the opposite story if Trump triumphs - although in both cases it also depends what happens on Capitol Hill.

Here’s ING’s cheat sheet:

.

They’ve also produced this map, showing how Pennsylvania and Florida could be the key to the contest. If Trump loses one, he needs the other plus four more key swing states:

.

Updated

Investors betting on a Clinton victory should remember the 24th June, when the Leave campaign defied the pollsters and won Britain’s EU referendum

It could happen again this week, warns Luke Hickmore, senior fixed income fund manager at Aberdeen Asset Management:

“Markets are edging towards Clinton largely because of polling and we saw in the Brexit referendum how wrong that can be.

The memory of that referendum should loom large in investors’ memories because so much of the polling was wrong then.”

(quote via Reuters)

A catchup: Stock markets rally after FBI clears Clinton (again)

(COMBO) This combination of pictures created on November 04, 2016 shows US Republican presidential nominee Donald Trump in Atkinson, New Hampshire on November 4, 2016 and US Democratic presidential nominee Hillary Clinton in Raleigh, North Carolina, on November 3, 2016. With only days to go until Election Day, Hillary Clinton and Donald Trump were barnstorming battleground states. / AFP PHOTO / MANDEL NGAN AND Jewel SAMADMANDEL NGAN,JEWEL SAMAD/AFP/Getty Images

OK, it’s breakfast time in America (on the easterly side of the country, anyway) so let’s quickly recap.

Stock markets have rallied strongly this morning after Hillary Clinton received a late boost in her bid to become US president. Shares have jumped in Asia and Europe, following the news that the FBI have found no evidence of criminal wrongdoing over her private email server.

Investors are calculating that FBI James Comey’s announcement raises the chances that Clinton beats Donald Trump to the White House.

So they’re putting money into shares, and taking it out of safe assets such as gold and the Japanese yen.

Here’s the situation:

  • FTSE 100: Up 96 points or 1.4% at 6789
  • German DAX: Up 170 points or 1.6% at 10429
  • French CAC: Up 76 points or 1.75% at 4454

Wall Street traders are expected to send share prices romping higher when trading begins in a couple of hours. This follows nine days of consecutive losses, as election uncertainty has bitten.

The Dow Jones industrial average is being called up 229 points, or over 1.2%.

Conner Campbell of SpreadEx says:

Looking ahead to the US open and it seems that there is going to be a rare example of the Dow Jones and dollar both heading in the same direction this afternoon. With the greenback already on a tear the Dow is expected to rise more than 200 points after the bell, putting it back above the 18000 it fell below last week.

The US dollar is enjoying a strong rally, and is up one cent against the British pound at $1.242. But the Mexican peso is doing even better; which also suggests traders are cutting the chances of a surprise Trump victory.

New polls have given Clinton the edge in the national polls, with Bloomberg giving her a three-point lead. But key battleground stakes such as Ohio, Michigan, Pennsylvania and Florida will determine the battle.

Joshua Mahony, market analyst at City trading firm IG, says European stock markets are “in a buoyant mood” following the FBI announcement.

The big question is whether this announcement will have a material effect upon the outcome of the US election, which is clearly perceived to be the case according to today’s market reaction.

But investors are also nervous, especially given the recent Brexit shock:

With the IG binary now showing an 83.5% chance of a Clinton victory (up from Friday’s 74%), it is clear that traders expect this announcement to have a substantial impact upon the election result.

However, if the EU referendum taught us anything, it is to not be complacent when there is a vote against a campaign which appeals to the disaffected and marginalised section of a population.

Updated

Here’s another poll, giving Hillary Clinton the edge:

This is helping to keep stock markets buoyant today....and possibly setting investors up for a big fall on Wednesday, if the polls are wrong.

Nomura: Here's when the result might come in

Investors (and concerned citizens) across Europe need to decide whether to pull an all-nighter to follow the US election, or get up extra-early to see the result.

Based on the last four elections... we can say that the results could be in by 5am GMT (or midnight in New York), if it’s a decisive win for either candidate.

In 2008 and 2012, Barack Obama has given his victory address before the London stock markets had opened.

But in 2004, we didn’t get the result until around lunchtime in New York, when the City of London was winding down for the day.

And the 2000 race between George W Bush and Al Gore wasn’t decided for a month - following legal challenges over the result in Florida.

Analysts at Japanese bank Nomura say:

Hopefully by 4am to 5am (GMT) on Wednesday we’ll have a good idea, but if it’s close…it could be another 12 hours (or more) from then.

They’ve created some handy graphics to show how the last four races ended, and how this year’s could play out:

.
.

Updated

Just in: Clinton holds a three point lead over Trump, according to a Bloomberg poll conducted between Friday and Sunday.

Updated

There are two scenarios in which the US election could spark a stock market rout, says Mohamed A. El-Erian, the chief economic adviser of investment giant Allianz.

The first, unsurprisingly enough, is that Donald Trump becomes US president, sending share prices sliding as investors fear for the future.

El-Erian explain why, in an article for Bloomberg.

An equity market selloff is likely should Donald Trump win the presidential vote and also reaffirm his intention to move quickly on policy positions that disrupt long-standing trade relationships (such as tariffs on China and Mexico and the revocation of the North American Free Trade Agreement).

The selloff would be larger if he also were to also create uncertainty about the future shape of the financial system, such as by calling for an immediate repeal of the Dodd-Frank legislation without offering a credible alternative.

The second scenario is that Hillary Clinton wins the White House, and the Democratic party takes control of Congress. That would clear the way for reforms to clean up the energy sector, and price controls on biotech companies, along with higher government borrowing to boost growth.

The other tail event, a Clinton win combined with a Democratic sweep of Congress, would likely bring about an equity market selloff that would entail more pronounced moves for certain sectors (such as pharmaceuticals and traditional energy).

Bond markets would also come under pressure because of the higher probability of fiscal stimulus.

Updated

World First’s chief economist, Jeremy Cook, has taken a stab at how tomorrow’s election may play out:

Every European stock market has jumped by at least 1% today, led by Italy’s FTSE MIB index, setting the scene for a Wall Street rally:

A Wall Street sign outside an entrance of the New York Stock Exchange in New York.

Today’s stock market rally shows that Hillary Clinton deserves her reputation as Wall Street’s favoured candidate, says Yann Quelenn, market analyst at online bank Swissquote.

He writes:

This morning, the US elections is definitely the financial markets’ barometer.

Futures on the S&P are up 1.3% at the moment and we should see a good day on stocks. This relief rally is definitely proving the fact that markets are clearly supporting Hillary, justifying her “Candidate of Wall Street” moniker.

Consequently, a Clinton win would spark a significant relief rally in overly-bearish positioned markets.

Queleen also reminds us that the US stock market just racked up a nine-day losing streak, for the first time in 36 years, as panicky investors fled the trading floors.

The US dollar’s resurgence has brought the British pound back to earth with a bump, and back below $1.24.

Sterling rallied strongly last week, on hopes that the UK government might negotiate a ‘softer’ Brexit. It got a real lift on Thursday, after the high court ruled that prime minister Theresa May can’t trigger the exit process without parliament’s approval.

But the dollar now has the upper hand, following the FBI’s decision. And that shows the US election is a more immediate concern than Britain’s departure from the EU.

The pound vs the US dollar
The pound vs the US dollar Photograph: Thomson Reuters

Sterling’s weakness continues to push shares higher in London, as it means international-focused firms who earn money in US dollars will benefit.

Since June, we’ve seen a clear pattern that the FTSE rises when the pound fall, and vice versa, as Neil Wilson of ETX Capital explains:

Driving the FTSE 100 higher today are the big foreign-earners like drug companies, miners, oil producers and HSBC – the bank makes up over 5% of the FTSE 100 by index weight so today’s 4% rise is helping the blue chip index in no small way.

Updated

For Sale signs.

Back in the UK, the Halifax bank has reported that British house prices jumped by 1.4% last month.

That’s much stronger than expected, and something of a surprise as rival lender Nationwide has already decided that prices were flat in October.

It may mean that households aren’t too worried about the prospect of Britain leaving the EU, says Rob Weaver of property crowdfunding platform Property Partner.

The market suffered an initial wobble post-Brexit but is proving resilient, mostly the result of the severe supply shortage that’s helping to prop up prices.

And here’s a chart showing how the Mexican peso rallied hard overnight, as the FBI’s announcement hit the wires:

Here’s confirmation that the US stock market is on track for a pre-vote bounce:

Gold Bullion.

Gold is getting a hammering this morning, as fears of a Trump presidency recede.

The gold price has dropped by 1.4% to $1.286 per ounce, ending its recent rally.

Gold had benefitted from anxiety over the US election, with investors looking for somewhere safe to put their money.

You can almost hear the sigh of relief from the City, as fears over the US election subside.

Connor Campbell of SpreadEx says:

Election fears be damned! The European markets roared into life this Monday following a bit of good news for the Clinton campaign....

The thinking will be that this news may well swing any undecided voters back towards Clinton, therefore lifting her already substantial chances of winning Tuesday’s election.

However, regular readers may remember that the stock markets also rallied on June 23rd, on predictions that the Remain campaign would win the UK’s EU referendum.

It didn’t quite turn out like that, as Campbell reminds us:

Given that Trump-fears were what dragged the market down at the end of last week it is understandable that the markets have seen such explosive gains after the bell – though, it must be noted, there were similar scenes before the Brexit back in June.

Experts: Risk-on after Clinton's email boost

Financial analysts say that the markets are betting on a Hillary Clinton win this morning, after the FBI gave the ‘all-clear’ last night.

Kit Juckes of Societe Generale explains:

Yesterday’s statement from the FBI that there was nothing new in the latest batch of Clinton emails, has swung market sentiment back towards a Clinton win and risk is “on”.

Whether voters see it that way, we”ll see soon enough. Gold, yen are down; yields, equities, oil and the dollar are up.

Sean Callow, a senior strategist at Westpac Banking Corp. in Sydney, says today’s market rally shows that investors are worried about a Trump victory:

“A Clinton win would clear the decks for the Fed to raise rates in December and for markets to price in a more aggressive profile for tightening over 2017”

“The surge in U.S. equity futures and slide in the gold price reinforces the evidence that a Trump win is seen as negative for global growth and profits.”

But Rachel Cunliffe, deputy editor of news website Reaction, points out that Clinton may still be damaged:

Wall Street is expected to join the rally when trading begins in around six hours time.

The futures market is predicting that the Dow Jones industrial average will gain 230 points, or 1.2%.

Britain's FTSE 100 jumps

Banks and natural resource stocks are leading the rally in London, driven by bets that Hillary Clinton is on track for victory.

Mining giants BHP Billiton, Antifagasta, Rio Tinto and Glencore are all among the risers, along with HSBC (which posted financial results this morning).

They’re driving the FTSE 100 up sharply in early trading, with only a handful of stocks struggling.

The FTSE 100 in early trading
The FTSE 100 this morning Photograph: Thomson Reuters

Henry Croft of Accendo Markets says the rally is triggered by Hillary Clinton getting the all clear from the FBI for a second time.

Polls are indicating Clinton pulling away slightly, although her lead remains well below the levels pre-FBI investigation. The election will be the driving force for markets before Wednesday morning.

Of course, the internationally-focused FTSE 100 index also benefits from the weak pound (which has shed a whole cent this morning to $1.241).

Updated

European markets jump

Ding Ding! European stock markets are rallying, as traders react to the overnight news from America.

In the City, the FTSE 100 blue-chip index has jumped by 100 points, or 1.5%.

There are similar gains in Paris and Frankfurt, as money pours into riskier assets - and out of save havens like gold and the Japanese yen.

Kathleen Brooks of City Index says the FBI’s decision to clear Clinton (again) could be a ‘game changer’ in the race for the White House.

But investors will wonder how much damage has already been done, in the nine days after James Comey announced that a new set of emails were being examined.

Brooks says:

The Clinton camp will be hoping that the reopening of the FBI investigation, which turned out to be for nothing, put off not too many early voters.

Ultimately it all rests on the Electoral College votes, and in this area Hillary Clinton’s lead looks solid, but not as insurmountable as it once did. She is predicted to win 216 votes, vs. 164 for Trump. However, we expect her lead to widen once more, if the latest FBI announcement translates into more Electoral College votes on Monday, as we expect.

She adds that traders won’t be counting Donald Trump out of the race, though:

You can’t rule out Trump, and the risk of shy Trump voters disrupting polling expectations in key swing states such as Florida and Ohio remains a known unknown in this election race. For markets this is ultimately the key concern – traders don’t have any special insight into this outcome of this election and this may limit market cheer at the start of this week on the back of Clinton’s email scandal being put to bed (again.) Traders may prefer to sit on the sidelines until the actual result is called

US dollar jumps (along with the Mexican peso)

The US dollar is on a tear this morning, following after the FBI confirmed that it won’t bring charges against Hillary Clinton over emails related to her personal email server.

The greenback has gained 0.7% against the euro, and almost 0.9% against the pound, in a broad-based rally against other leading currencies.

But the Mexican peso is actually gaining ground against the dollar. It rises whenever Donald Trump’s victory chances fall, given the Republican nominee’s plans to build a large wall on the US border.

The agenda: Markets rally on Clinton victory hopes

Good morning, and welcome to our rolling coverage of the world economy, the financial market, the eurozone and business.

After a particularly lengthy and bloody battle, the US presidential race is heading into its final hours. In 48 hours time, we’ll probably know whether Hillary Clinton or Donald Trump have claimed the White House.

And shares are rallying across the world after Clinton got a late boost -- with FBI director James Comey announcing that he will not bring charges against the Democratic candidate after examining a new set of emails.

Comey told Congress last night:

“Based on our review, we have not changed our conclusions that we expressed in July with respect to Secretary Clinton.”

Clinton’s camp has welcomed the news that Comey has confirmed his initial decision back in July (although they must still be irked that the FBI chief shook up the campaign nine days ago by announcing that the emails were being probed).

Trump reacted in a fairly predictable manner - crying foul and claiming that the FBI couldn’t actually review 650,000 emails in eight days.

Either way, Comey’s announcement has sparked a wave of buying, as investors around the globe calculated that Clinton’s chances of success have risen.

Shares have jumped in Asia, with Japan’s Nikkei gaining 1.6%.

The Japanese, Australian and Hong Kong stock markets
The Japanese, Australian and Hong Kong stock markets Photograph: Thomson Reuters

And European and US markets are expected to follow suit, with the FTSE 100 tipped to jump by 1%. The US dollar is also gaining.

Michael Hewson of CMC Markets says:

The US dollar has rebounded and equity markets look likely to follow suit this morning, after both fell heavily last week on fears about the unknown quantity a Trump win would mean.

As the more status quo candidate, Clinton is definitely the markets’ preferred winner; she’s less likely to provoke a global trade war or destabilise the geopolitical order by pulling back from Nato (Trump has suggested members of the alliance should pay for America’s protection).

Trump’s attacks on America’s top central banker, Janet Yellen, have also alarmed investors.

Naeem Aslam of Think Markets explains:

The question which traders are concerned about is whether a Trump’s victory can really topple the investor confidence in the market? Well, that depends on if he will be a typical politician or not. If he sticks to his words and fires Janet Yellen from her job, the market is going to see that as a massive event of uncertainty....

Also, if he increases the trade tariffs, it will impact the growth in China and Mexico (this is where he has the strongest view). The spill over effects will not only be limited to emerging markets, but also in the developed markets as well.

Also coming up today....

Although the US election is the main event, the City will also get some new economic data to digest

  • 8.30am GMT: Halifax house price index, showing how the UK property market performed in October
  • 9.30am: Sentix’s survey of eurozone investor confidence for November
  • 10am: Eurozone retail sales for September

We’ll be tracking all the main events through the day...

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