Dear Kizzi,
It looks like the Senate is about to hand Kamala Harris the veto vote with 98% of the votes counted and the probability of a Democratic sweep is now at 95%. This means markets will anticipate more fiscal stimulus which could prop up inflation and mechanically push US interest rates higher but this also increases the prospect of more regulation imposed on technology companies as well as corporate tax hikes.
This could naturally drive interest rates-sensitive growth stocks lower, typically technology stocks, as NASDAQ Futures illustrate by extending losses to 2% this morning. With 10-Year Treasury yields above 1% on expectations of a Democratic Senate and the Fed committed to support the market, the US Dollar would be expected to further tilt lower versus its main peers.
Olivier Konzeoue, FX Sales Trader at Saxo Markets