In the US midterm elections held on 3 November, the Democrats recaptured majorities in both chambers, and markets confirmed a retreat in uncertainty and stronger risk appetite. In tandem, crude oil plunged and long-term yields fell, while dollar-yen moved sharply for a time.
In the US midterm elections held on 3 November, the Democrats recaptured majorities in both chambers. Political uncertainty receded, and the stock market saw an acceleration in buying to cover short positions. In the foreign exchange market, risk-on yen selling emerged, and dollar-yen moved into the ¥158 range for a time.
In energy markets, crude oil plunged as the move was interpreted as reflecting expectations of easing tensions in the Middle East, with WTI futures recording a decline of more than 8%. US long-term yields fell sharply as a result.
In bond markets, lower oil prices eased inflation concerns, and long-term European yields also declined. In foreign exchange markets, risk-on yen selling provided support, suggesting that dollar-yen could enter a range-bound market.
As geopolitical risks related to the political situation are reassessed and scenarios involving fiscal expansion continue to be reviewed, market attention is expected to focus on future interest-rate trends and energy prices ahead of the December FOMC meeting and the next CPI release.