Thursday Morning Briefing: Fed Pauses, Asia Falls, Gold Gains As U.S. Election Looms

Asian equity markets opened weak after U.S. indices continued to slump on uncertainty over the outcome of next week's presidential election. Bonds rallied and gold strengthened as investors searched for safe havens. Japanese equity markets are shut on account of a holiday.

Fed Hike In December?

U.S. Federal Reserve policymakers left interest rates unchanged but said they needed only “some further evidence” that inflation and employment were on track to reach their goals, to raise borrowing costs.

The odds of a Fed rate hike by December jumped up to 78 percent from 68 percent on Tuesday, according to data compiled by Bloomberg.

The Fed's decision to keep interest rates on hold did little to allay the fear of investors about the outcome of the U.S. election scheduled for November 8. The U.S. equity markets fell for the seventh day in a row, with S&P 500 Index falling 0.65 percent, and the NASDAQ Composite Index shedding 0.95 percent.

Hillary Inches Ahead Of Trump

Independent voters are backing Democratic Party nominee Hillary Clinton over her Republican rival Donald Trump, according to a Purple Slice online poll conducted for Bloomberg Politics. Clinton leads her opponent 39 percent to 35 percent among likely voters who don't identify with either party, a group that represented 29 percent of the electorate in the last presidential election.

Gold Trades Near $1,300

Gold rose to a one-month high as investors braced for the outcome of the tightening U.S. presidential race next week. A Donald Trump victory is seen boosting the demand for safe haven assets like gold, while a rate hike from the Fed would reduce the yellow metal's allure.

Oil prices fell further after a record rise in crude stockpiles and skepticism over an OPEC (Organization of the Petroleum Exporting Countries) deal to cut output.

U.S. crude inventories increased by a record 14.4 million barrels last week, the most since 1982, according to data from the Energy Information Administration.

Libya, Nigeria and Iran, all exempted from an output cut from OPEC, pumped a further 4 lakh barrels per day in October, according to data compiled by Bloomberg.

Sell-Off To Continue?

The SGX Nifty Index was trading 0.3 percent lower at 8,512 as of 7:10 a.m. indicating further weakness for Indian equities, which had fallen 1.3 percent in Wednesday's session.