Financial markets soared ahead of the US Presidential election as the dust would be settled regarding who would rule in the coming four years. Commodities also gained as the US dollar declined amid the mixed message sent from the ISM non-manufacturing index. Crude oil prices gained with the front-month WTI and Brent contracts gaining +0.93% and +1.94% respectively. Gold rebounded +0.48% from the selloff last Friday.

As the US presidential election approaches, a Pew Research Center poll conducted between October 31 and November 3 suggested that President Obama’s support was 48%, compared with Romney’s 45%, as the handling of Hurricane Sandy probably gave some credits to the President. On the dataflow, the ISM non-manufacturing index fell to 54.2 in October from 55.1 a month ago. The market had anticipated a milder drop to 54.5. On the components, the "new orders" index slipped -2.9 points to 54.8 while the "employment" index climbed +3.8 points to 54.9.

In the Eurozone, people in Greece protested as the government plans to implement a new round of austerity measures so as to get the next tranche of bailout. These measures include spending cuts and tax hikes and are expected to save around 13.5B euro in 2013-14. The ECB is expected to leave its both standard and non-standard monetary policies unchanged at its Thursday meeting. For the BOE, Governor Mervyn King stated last month that "should those [more positive] signs fade the MPC does stand ready to inject more money". While the majority of the member might still opt for a status quo at the upcoming meeting, we expect to see a split in the decision making process.

In Australia, the RBA left the cash rate unchanged at 3.25%. At the accompanying statement, Governor Glenn talked about the upside surprise on inflation. According to him "recent outcomes on inflation were slightly higher than expected, though they still show inflation consistent with the medium-term target, with underlying measures around 2.5% over the year to September, and headline CPI inflation a little lower than that". Moreover, "the introduction of the carbon price affected consumer prices in the September quarter, and there could be some further small effects over the next couple of quarters". We retain our view that the RBA would announce one more cut by the end of the year.

Oil and Gold Reports contributed by Oil N' Gold