Markets remain jittery as US election campaign nears end

Investors are becoming more jittery amid a tightening race for the US presidency, sending gold higher for a sixth day while weighing on equities and the Mexican peso.

Egypt's currency tumbled as the central bank switched to a freely floating exchange rate. Bullion climbed to a one-month high, US and European equity index futures fell, and Asia ex-Japan stocks held near their lowest level since September after Fox News reported that an FBI probe involving Democratic nominee Hillary Clinton was intensifying.

The peso slid versus all major peers on concern Mexican exports will suffer if she loses. Bloomberg's dollar index dropped for a fifth day amid speculation the election's fallout could deter the Federal Reserve from raising interest rates next month.

Investors turned more risk averse over the past week as voter surveys suggested Clinton's once dominant lead over Donald Trump was faltering ahead of the November 8th election.

Poll aggregator FiveThirtyEight gives her a 68 per cent chance of victory, 14 per centage points less than it estimated before a Friday announcement that the FBI had reopened an investigation into her use of an unauthorised email server while secretary of state.

Bets on a December interest-rate hike by the Fed were stepped up on Wednesday as the central bank left policy unchanged and signalled a December move was likely.

"US political uncertainty ahead of next week's election is weighing on markets," said Elias Haddad, a senior currency strategist at Commonwealth Bank of Australia in Sydney.

“Most polls suggest the presidential election is turning out to be a closer call now compared to a few days ago following the controversy about Hillary Clinton’s email investigation. In the short term, this should weigh on the dollar particularly versus the yen and euro.”

The FBI’s investigation into Clinton has taken on a very high priority, Fox News reported, citing unidentified sources.

She led Trump by 39 per cent to 35 per cent among independents surveyed Friday through Monday, the latest Purple Slice online poll for Bloomberg Politics showed.

Commodities

Gold climbed 0.4 per cent to more than $1,300 (€1,171) an ounce as of 7:06am, extending its longest winning streak since September.

"Gold was stronger on the back of safe-haven buying as opinion polls on the US election continued to show Trump gaining," Australia and New Zealand Banking Group said in a note. "Weak equity markets also helped improve investor appetite."

Aluminium extended Wednesday’s retreat from its highest level since June 2015 in London, while nickel, zinc and lead rose more than 1 per cent.

Crude oil advanced 0.7 per cent to $45.67 a barrel. It tumbled 2.9 per cent in the last session as data showed US inventories rose by 14.4 million barrels last week, the biggest gain in data going back to 1982 and more than the two million barrel increase forecast in a Bloomberg survey.

Record OPEC output last month is also damping the outlook for oil, complicating the group’s effort to stabilise prices.

Stocks

Futures on the SandP 500 Index fell 0.3 per cent following a seventh day of losses in the US benchmark, its longest selloff since November, 2011.

Nasdaq 100 Index contracts declined 0.5 per cent after Facebook slid in extended New York trading after reporting earnings.

The social network predicted an uptick in costs and a slowdown in advertising sales growth.

Euro Stoxx 50 Index futures declined 0.2 per cent. Swiss Re, the world's second-largest reinsurer, said profit fell in the third quarter and results were also posted by Credit Suisse Group, ING and Societe Generale.

About three shares declined for every two that rose on the MSCI Asia Pacific excluding Japan Index, which was little changed after sliding 1.4 per cent in the last session.

New Zealand’s benchmark stock gauge entered a correction, while Hong Kong’s Hang Seng Index held near its lowest level since August.

Currencies

The Bloomberg Dollar Spot Index, which tracks the currency against 10 major peers, fell 0.3 per cent.

The yen strengthened as much as 0.7 per cent to a one-month high and South Korea’s won rebounded 0.7 per cent from near to a three-month low.

A JPMorgan Chase index of global currency volatility held at a seven-week high.

"The market's concerned that the FBI investigation will swing next week's election," said Mansoor Mohi-uddin, a Singapore-based strategist at Royal Bank of Scotland Group.

– Bloomberg