U.S. Elections: Latest Polls and Market Outlook

As voting continues across the United States, the first significant results in terms of electoral votes are expected around 1:00 AM. Let's examine recent polls and the current market conditions.

Tight Race, Bookmakers Favor Trump

The situation remains similar to recent weeks, with most polls showing a very close race. Compared to previous elections, the current presidential contest appears remarkably tight.

Real Clear Politics polls indicate a neck-and-neck battle. Since mid-October, Harris's support has been declining while Trump's has been rising, though the difference remains within the margin of error. Source: Bloomberg Finance LP

Data from Polymarket shows a significant gap between Trump and Harris, with users predicting over 60% chance of a Trump victory. Source: Bloomberg Finance LP

PredictIt's high-frequency data also points to a close contest between Trump and Harris. Source: Bloomberg Finance LP

Market Conditions

The EURUSD pair is trading at very high levels, with recovery ongoing for several days despite high U.S. yields. While Trump is theoretically better for the dollar, the EURUSD seems to be retreating from this scenario. However, from late September's perspective, EURUSD remains quite low.

Wall Street appears bullish, rebounding after Friday's post-NFP declines. Trump Media and Tesla shares are surging, potentially linked to Trump's high win probability. Historically, the S&P 500 gained after both Trump's and Biden's elections in 2016 and 2020, respectively (though the latter coincided with Covid recovery).

Gold market volatility is minimal. If gold doesn't breach $2,755 per ounce, a Head and Shoulders formation may develop. Previous elections saw gold pullbacks over the next 20-30 sessions due to risk and profit realization. Currently, gold is up over 30% annually, a phenomenon last seen in the late 1970s and early 1980s.

Market Uncertainty Prevails

Conflicting poll and bookmaker predictions are fueling market uncertainty. A Harris win could potentially trigger more volatility. The USDJPY options market, typically the most liquid pair on election night, indicates higher potential volatility than during the 2016 and 2020 elections. 

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Source: Bloomberg Finance LP, XTB

Election Night Results: A Waiting Game?

Voting ends at different times across states, with key swing states closing at 1:00, 1:30, 2:00, 3:00, and 4:00 AM. Exit polls and partial results will be available after these times. However, some states, like Pennsylvania, can only start counting votes (including mail-in ballots) after polls close. In case of narrow margins in exit polls, determining results in individual states on election night may be challenging. Recall that in 2020, states like Georgia and Pennsylvania saw very tight races between Biden and Trump. The outcome may again be decided by just a few thousand American voters.

Closing hours of polling stations in the USA. Source: Green Papers, XTB

Results from crucial states like Georgia, Michigan, and especially Pennsylvania may not be available on election night. Source: The Washington Post