World Markets Brace for Volatility Amid US Election

Global markets are bracing for volatility ahead of the presidential election in the United States, with stock markets rising and Treasury yields rebounding, as investors await early results.

While volatility in stocks and bonds is moderate, currency markets showed heightened concern, particularly with the U.S. dollar, reported Reuters.

The VIX "fear index" is lower this presidential election compared to the 2020 election. But the 'fear index' is still higher than it has been in the last few months, a reflection of ongoing uncertainty, experts said.

The euro and dollar saw a spike in the market significantly in comparison against the Mexican peso, reported the news outlet. This activity could be influenced by proposed tariffs set by Donald Trump, if he wins a second term. Even the crypto market wasn't immune to volatility, where altcoin and Bitcoin is set to break a major record.

Markets are pricing in a potential "Red Wave," favoring a Republican win, said analysts at TD Securities in the report, but polls suggested a 'knife-edge' race between Trump and Democratic nominee, Kamala Harris.

The U.S. 10-year Treasury yield rose to its highest in four months, driven by inflation, a surge in oil costs, and international and domestic crises despite expectations of a Fed rate cut.

In Asia, Chinese stocks surged due to policy support.

Investors are focused on battleground states, with a Trump win signaling barriers.