Key US election result could arrive during Asian market hours

Delayed reporting and a contested US election remain a possibility, but a key result in the swing state of Florida could arrive during the Asian trading morning on Wednesday, while US and European markets are technically closed

by Jon Macaskill
Key US election result could arrive in Asian trading morning
Americans line up to vote early in the US Presidential election, which has seen tens of millions – unprecedented numbers - queuing up all across the country to cast their ballot early, partly to avoid crowded voting areas because of concerns about the coronavirus, but also because they know the result could be close and legally contested. File photo by AFP.

(ATF) In-person voting in the US elections on Tuesday November 3 will conclude a process that has actually been underway for some time, with unprecedented numbers of Americans voting early, either via mail or by attending polling stations.

Rules on counting votes vary by state and there are likely to be significant delays in compiling a final result for the election in some key swing states, such as Pennsylvania.

President Trump has already pledged to contest the results of the election if he loses and has been casting doubt on the security of the system for voting by mail, so a period of prolonged uncertainty and market volatility remains highly likely.

But a key swing state result – for Florida – could be announced during the evening of November 3 in the US, when Asian trading is in full swing but US and European markets are technically closed.

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Polls in Florida close at 8pm Eastern standard time and the state allows its counties to process absentee ballots early, and has a track record of quickly counting mail votes.

So a result might be seen as early as 10pm US Eastern standard time, which will be 11am on Wednesday November 4 in Hong Kong and Singapore, and 12am in Tokyo.

That will be 3am in London on the morning of November 4, so European markets will be closed along with US exchanges, which could boost trading volumes in Asia.

Dealing rooms – or their virtual equivalents – in the US and Europe will be staffed to cover the overnight US period in order to conduct trades and provide feedback for clients. 

And many markets such as foreign exchange trading work on close to a 24-hour schedule anyway, though with meaningful dips in liquidity when major dealing hubs are closed.

A clear result in Florida could nevertheless still give a significant boost to Asian trading volumes on the morning of Wednesday November 4. 

A barometer

Florida is often a barometer for the ultimate result in closely contested US elections and a win for Biden would narrow the potential path to an electoral college victory for Trump.

Florida carries a significant 29 electoral votes out of the total of 538 and its surprise move towards Trump in 2016 was an early indication that he was on the way to winning an upset victory over Hillary Clinton.

A decisive margin of victory for Biden in Florida this time would be widely taken as a sign that Trump will fail in other key states that take longer to report their results.

That in turn could drive activity in Asian markets as investors try to position for an anticipated Biden presidency and a possible accompanying Democratic majority in the Senate that would allow him to pass legislation.

Florida also has a history of very close margins in elections, however, notably in 2000 when a series of recounts of votes caused weeks of uncertainty before George W Bush was eventually declared the victor in the state, and the new president.

Intervention by the US Supreme Court was required to determine the result of the 2000 presidential election and there is every chance that another series of legal battles and market volatility will be seen this year.

But the Asian trading morning of Wednesday November 4 could provide early direction for global markets, as well as brisk dealing volume.

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