Reports over the weekend indicated that progress toward peace with Iran was easing tensions in the Middle East, sending crude oil prices lower. US stocks showed signs of regaining their risk appetite after a correction.
Over the weekend, reports emerged of moves toward peace efforts with Iran, and tensions in the Middle East were said to have eased somewhat. Crude oil prices fell accordingly, and a measure of relief spread across the markets. There was speculation that US stocks, which had undergone a sharp correction, now had more room to take on risk.
Today is finally being described as US election voting day, and the markets are expected to maintain a wait-and-see stance. In the foreign exchange market, euro/US dollar continues to move narrowly around 1.12, while dollar/yen is trading in the upper ¥157 range. Attention is focused on whether blue-wave-leaning positions will be unwound across the broader market.
Overall, views are spreading that the direction of foreign exchange markets will become more uncertain depending on the outcome of the US midterm elections and subsequent policies. Market reactions have been limited, and developments are expected to await further reports.