(Bloomberg) -- Mexico's peso gained with Asian equities and U.S. stock index futures after the Federal Bureau of Investigation said it maintains the view that Hillary Clinton's handling of her e-mails wasn't a crime. The yen and Swiss franc retreated with gold.
Mexico's currency, which has tended to strengthen on signs Republican presidential candidate Donald Trump's campaign is faltering, climbed the most since September and the MSCI Asia Pacific Index rebounded from its lowest level in more than a month amid the final run-in to Tuesday's presidential election. The Canadian dollar also advanced, while the yen sank by the most in a month. U.S. Treasuries fell with Australian government bonds and gold dropped for the first time in eight days.
The FBI is sticking with its view that Clinton's handling of e-mails during her tenure as secretary of state wasn't a crime, after reviewing new communications potentially related to the Democratic candidate, director James Comey said in a letter to Congress. Comey's statement just over a week earlier that the bureau was looking into more e-mails sparked a selloff in risk assets, with U.S. stocks capping their longest run of losses since 1980. The peso's fortunes have been tied to Trump's campaign given his pledge to renegotiate trade deals with Mexico and to build a wall along the U.S. border.
“The market is viewing the latest Hillary Clinton news as a positive, at least in the short term,” said Richard Sichel, chief investment officer at Philadelphia Trust Co., which oversees $2 billion. “It may still be a close call in the end, but the market for the time being is acting as if some of the uncertainty is gone.”
For a guide to trading in the lead-up to the Nov. 8 vote, click here.
Minutes of the Bank of Japan's September meeting are due out Monday. Australia reports on job advertisements and a swathe of updates on foreign-currency reserves are scheduled, including for China. Indonesia issues data on gross domestic product.
Currencies
The peso climbed 2.3 percent versus the dollar as of 9:21 a.m. Tokyo time. The currency fell in each of the last two weeks after news the FBI was reviving its probe into Clinton's emails -- an issue that has dogged her campaign -- saw her lead over Trump narrow in opinion polls.
The loonie, which some analysts have suggested is also moving on U.S. election sentiment, snapped a three-day decline to climb 0.2 percent.
“Low Asian liquidity looks to have exaggerated the moves,” said Elias Haddad, a senior currency strategist at Commonwealth Bank of Australia in Sydney. “Nonetheless, U.S. political uncertainty ahead of Tuesday's presidential elections will continue to generate dollar volatility as most swing-state polls suggest the election outcome will be a close call.”
The yen weakened 0.9 percent to 104.01 per dollar. The haven currency rallied 1.6 percent last week, the most since July. The franc slipped 0.5 percent, after surging 2 percent last week.
Stocks
The MSCI Asia Pacific Index added 0.2 percent, led by finance stocks. Japan's Topix index gained 1 percent as benchmarks advanced across markets open for trading.
“All that drama and yet the FBI director is sticking to the same conclusion that they had in July with respect to Hillary Clinton's e-mail,” Naeem Aslam, chief market analyst at Think Markets U.K. Ltd. in London, said in an e-mail. “This is good news for investors who have an appetite for risk in this environment.”
S&P 500 Index futures jumped 1.2 percent following a nine-day slide in the underlying benchmark. The CBOE S&P 500 Volatility Index, a gauge of expected swings in U.S. stocks, soared 39 percent last week as Clinton's lead was cut. While the race has tightened, the Democratic nominee maintains a 2.2 percentage-point lead over Trump, according to an average of polls by RealClearPolitics.
--With assistance from Narayanan Somasundaram To contact the reporters on this story: Emma O'Brien in Wellington at eobrien6@bloomberg.net, Joseph Ciolli in New York at jciolli@bloomberg.net. To contact the editors responsible for this story: James Regan at jregan19@bloomberg.net, Tracy Withers
Essential Business Intelligence, Sharp Market Insights, Practical Personal Finance Advice, Daily Fuel, Gold and Silver Prices and Latest Stories — On NDTV Profit.
