By Tom Wilson and Rae Wee
LONDON/SINGAPORE (Reuters) -European and Asian shares slipped on Wednesday on uncertainty surrounding a closely contested U.S. election, while gold hit an all-time high and the dollar hovered near a three-month high.
With tepid appetite for risk, the Euro STOXX 600 fell 0.6% ahead of a slew of key economic data. Preliminary figures for third-quarter GDP in the euro zone are due later in the day.
British stocks fell 0.4% ahead of a UK budget announcement at around 1230 GMT, which is expected to include major tax increases and more borrowing for investment. Yields on British government bonds also fell in early trade
Gold rose to an all-time high of $2,784.82 an ounce, while the dollar bobbed near a three-month high against a basket of currencies.
Among riskier assets, bitcoin was one of few gainers, flirting with a record peak as markets weigh the prospect of a victory by Republican candidate Donald Trump, widely seen as favourable towards crypto.
“When it comes to macro, and the impact of geopolitics on macro, things look in decent shape,” said Samy Chaar, chief economist at Swiss private bank Lombard Odier in Geneva.
“The only question investors have in mind is how are the U.S. elections going to impact or challenge this kind of current state of affairs.”
Still, Wall Street futures ticked higher, buoyed by a solid result from Google-parent Alphabet, which reported quarterly revenue that beat estimates.
Other Big Tech earnings were in focus for investors. Facebook owner Meta Platforms and Microsoft report their earnings later in the day, followed by Apple and Amazon.com on Thursday. [.N]
Earlier in Asia, MSCI’s broadest index of Asia-Pacific shares outside Japan fell to a one-month trough and were last down 0.7%, tracking a decline in Chinese assets.
Next week’s U.S. election could have huge ramifications for the world’s second-largest economy, even as Beijing steps up efforts to shore up growth.
Reuters reported on Tuesday that China is considering approving the issuance of more than 10 trillion yuan ($1.4 trillion) in extra debt in the next few years to revive its fragile economy.
“China’s latest stimulus package appears underwhelming, with 60% allocated to local government debt relief,” said Saxo’s chief investment strategist Charu Chanana.
“Foreign investors are still highly concerned about potential tariff threats if next week’s U.S. elections result in a Republican sweep.”
U.S. FOCUS
On the economic front, investors were also bracing for a slew of U.S. data this week that could guide the outlook for Federal Reserve policy.
The ADP National Employment Report is due later in the day alongside advance third quarter GDP estimates, which will come ahead of Friday’s non-farm payrolls figures.
Data on Tuesday showed U.S. job openings dropped to more than a 3-1/2-year low in September.
“The U.S. data is still important for this week, there’s no doubt about it,” said Khoon Goh, head of Asia research at ANZ.
Meanwhile bitcoin stood just a whisker away from its peak of $73,803.25 and last bought $72,479.00, on track to gain 13% for the month.
In other currencies, sterling traders rushed to hedge against big price moves ahead of the UK budget. The pound held steady against the dollar and the euro.
The yen languished near a three-month low as it continued to feel the pressure from the loss of a parliamentary majority for Japan’s ruling coalition in weekend elections.
Brent crude futures ticked up 1.2% to $71.96 a barrel, while U.S. West Texas Intermediate crude futures CLc1 rose 1.3% to $68.05 per barrel. O/R
(Reporting by Tom Wilson in London and Rae Wee in Singapore; Editing by Jacqueline Wong and Christina Fincher)
