Markets Attempt to Recover Following US Presidential Debate, According to Reuters

Market Outlook: Key Developments Ahead

In today’s market analysis, we reflect on the recent U.S. presidential debate featuring Donald Trump and Kamala Harris, which was marked by plenty of exchanges but few concrete policy details. Notably, the event received added attention due to Taylor Swift’s endorsement of Harris shortly after the debate concluded.

Asian markets are largely down, and U.S. stock futures have dipped as well, with the dollar facing pressure. The debate saw both candidates engage on critical issues like immigration, foreign policy, and healthcare, yet specifics remained vague, leading to uncertainty among investors.

According to the latest data from an online prediction market, Trump’s chances of winning the 2024 presidential election have decreased, falling from 52% to 48%. Conversely, Harris’s probabilities have increased from 53% to 56%. This shifting landscape suggests that investors will remain on edge as the November election approaches, closely monitoring the economic policies proposed by both candidates.

Attention is now turning to the U.S. inflation report set to be released later today. Despite this, the Federal Reserve has emphasized that employment is currently taking precedence over inflation concerns. With a rate cut expected next week, there is significant speculation regarding the extent of this reduction; markets are currently assessing a one in three chance of a 50 basis point cut, alongside a total of 114 basis points of easing anticipated this year.

European stocks are expected to open lower, as traders anticipate the Federal Reserve’s decisions prior to the European Central Bank’s meeting on Thursday, where a rate cut is also on the agenda.

In other news, the yen experienced a notable rise, reaching an eight-month high. This surge follows remarks by Bank of Japan board member Junko Nakagawa, who indicated that the central bank would continue to raise rates if the economy and inflation align with forecasts.

Key Developments to Watch:

• Upcoming economic events include the UK GDP estimate for July, as well as UK industrial and manufacturing output data for the same month, along with the U.S. inflation report.

This analysis underscores the ongoing volatility in the markets as major economic indicators and political events unfold.