Investing.com-- U.S. stock index futures steadied in evening deals on Wednesday after Wall Street surged to record highs on Donald Trump winning the 2024 presidential election, with focus now shifting to the Federal Reserve. 

The central bank is widely expected to cut interest rates on Thursday. But its outlook on the path of interest rates is a point of uncertainty for investors. 

Futures steadied after Wall Street rallied to record highs on Wednesday, as investors cheered the prospect of lower corporate taxes under Trump, while the possibility of a Republican sweep in Congress presented a clear path for major policy changes. 

Sentiment was also buoyed by stronger-than-expected PMI data. 

S&P 500 Futures steadied at 5,690.0 points, while Nasdaq 100 Futures rose 0.1% to 20,909.75 points by 18:31 ET (23:31 GMT). Dow Jones Futures rose 0.1% to 43,923.0 points.

Wall St scales record high on Trump victory 

Wall Street indexes shot up on Wednesday after several networks declared Trump as the winner in the 2024 presidential elections. The former president had maintained a clear lead over Kamala Harris from the early counting of votes.

The Republicans won a majority in the Senate and also held a slim majority in the House of Representatives, with the prospect of a “red sweep” potentially giving Trump an easy path to enact sweeping policy changes.

Trump is widely expected to enact more inflationary policies, given his largely protectionist stances on immigration and trade. The dollar and Treasury yields rose sharply on this notion, although their gains did little to deter Wall Street.

The S&P 500 jumped 2.5% to a record high of 5,929.04 points on Wednesday, while the NASDAQ Composite rose 2.9% to a record-high 18,978.65 points. The Dow Jones Industrial Average surged 3.6% to 43,729.93 points, with the index logging its best day since 2022. 

Some positive chipmaker earnings also buoyed sentiment, after prints from GlobalFoundries Inc (NASDAQ:GFS) and Qualcomm Incorporated (NASDAQ:QCOM) beat expectations. Qualcomm rose nearly 7% in aftermarket trade, while GlobalFoundries added 0.5%, with Reuters reporting that the latter was poised to win government support from the CHIPS Act. 

Fed awaited for more cues on interest rates 

Gains on Wall Street now appeared to be cooling before the conclusion of a Fed meeting on Thursday, where the central bank is widely expected to cut interest rates by 25 basis points. 

But the bank’s outlook on interest rates remained a point of uncertainty, especially as recent data showed stickiness in inflation. 

Investors were seen sharply dialing back expectations for lower interest rates in the long-term, especially as Trump won a second term. 

By Yoruk Bahceli and Lucy Raitano

LONDON (Reuters) -Investors are bracing for further economic pain in Europe that could deepen euro losses and hurt its stocks, as a second Donald Trump presidency raises the prospects of hefty tariffs. 

European bonds emerged as winners, as expectations the European Central Bank will cut interest rates to counter an economic slowdown rose. But bets were generally contained as investors assess which of Trump's pledges will be implemented following his election victory on Wednesday.

The stakes are high for a region that has navigated the pandemic, war in Ukraine and global trade tensions in recent years and comes at a time of political uncertainty in France and Germany. Chancellor Olaf Scholz sacked Finance Minister Christian Lindner late on Wednesday, leaving the future of the German government unclear in Europe's biggest economy.

Trump has vowed a 10% tariff on imports from all countries, a big blow for the European Union which has the second-largest trade deficit with the United States globally and is the largest exporter to the U.S, according to JPMorgan. 

The EU faces more pain through its close ties with China, on whose imports Trump has pledged 60% tariffs, and may need to boost defence spending if Trump pulls U.S. support for Ukraine. 

 As traders raised ECB rate cut bets, shorter-dated German bond yields slid as prices surged. Longer-dated peers resisted a jump in U.S. Treasury yields.

"The bond market in Europe has responded by saying we should see lower growth, which can be offset by rate cuts from the ECB, but it's not going to be aggressive enough that it's going to push us into a nasty recession," said AXA Investment Managers' head of total return and fixed income Nick Hayes, who favours European bonds.

The mood was initially brighter in European stock markets, which rose reflecting a surge in U.S. peers and relief that the result became clear quickly. But they cut their gains and were last down 0.6% in late European trade. 

"The certainty is that he's back, the uncertainty is what he's going to do," said Hayes.  

In a clear sign of unease, the euro had plunged around 2% against the dollar and was set for its biggest daily drop since the height of the 2020 COVID crisis. 

JPMorgan, ING and ABN AMRO (AS:ABNd) reckon a drop to parity could be repeated under a Trump presidency depending on the extent of tariffs, as well as tax cuts that could fuel U.S. inflation and limit U.S. Federal Reserve rate cuts. 

IN THE BALANCE    

What comes next depends on the extent and pace of tariffs and tax cuts, how much they reignite U.S. inflation, and the countermeasures Europe and China take, investors said.

Whether Trump's Republicans take control of Congress will determine how much of his agenda he can implement. 

For now, traders expect around 130 bps of cuts by end-2025, versus around 120 priced in on Tuesday. 

Goldman Sachs said on Wednesday it expects more limited tariffs on Europe, foreseeing a 0.5% hit to euro zone output.

The euro, while sharply lower at around $1.07, is far from the parity level it last breached during 2022's energy crisis. Deutsche Bank (ETR:DBKGn) expects it to fall to $1.05 by year-end.

"Yes, tariffs are a big concern, but you have to put against that what relative growth is going to do," said Arun Sai, senior multi asset strategist at Pictet Asset Management, betting on euro zone growth stabilising while U.S. growth slows. 

Sai, whose firm dropped a bet against the euro in recent days, said he did not expect Trump to carry out all his tariff pledges immediately. 

Federico Cesarini, head of developed markets FX at the Amundi Investment Institute, said traders would have to completely price out Fed rate cuts to push the euro to parity. 

Traders still expect a Fed rate cut on Thursday and over 100 bps of easing by the end of 2025. 

MIXED PICTURE

While their rally lost steam, Europe's equity markets saw a key volatility tracker on track for its biggest daily drop in seven weeks. 

Defence and aerospace stocks outperformed, up 2% each, helped by expectations that Europe will have to step up defence spending.

Hani Redha, multi-asset portfolio manager at PineBridge Investments, said Europe's stock market reaction on Wednesday had to be seen "in the context of a pretty abysmal performance of European equities relative to pretty much every other region over the last three months."

"A lot of bad news is already built into the price," he added. 

Any gains could be short-lived as the impact of Trump's policies become clearer, investors said. 

Renewables, at risk from Trump's energy policies, fell sharply, as did auto stocks, expected to bear the brunt of potential new tariffs.

Denmark's Orsted (CSE:ORSTED) plunged over 12.7% while carmakers Porsche, BMW (ETR:BMWG) and Volkswagen (ETR:VOWG_p) fell 5.4%-7.7%. 

"Europe is getting the worst of both worlds and this comes at a time when the economy is struggling," said Seema Shah, chief strategist at Principal Asset Management, which is underweight European stocks. 

By Antoni Slodkowski, Liz Lee and Larissa Liao

BEIJING (Reuters) - As Americans voted in one of the tightest presidential elections in decades, China braced for an outcome that - regardless of who wins - would spell four more years of bitter superpower rivalry over trade, technology and security issues.

Strategists in Beijing said that while they expected more fiery rhetoric and potentially crippling tariffs from Republican candidate Donald Trump, some said he could be driven by pragmatism and willingness to strike deals on trade and Taiwan.

From Democratic candidate Kamala Harris, Beijing expected predictability and a continuation of U.S. President Joe Biden's approach centred on working with allies on China-related issues such as tech curbs, Taiwan, and conflicts in Ukraine and the Middle East.

Either outcome was unlikely to cause a shift, said analysts, given how wide-ranging the geopolitical rivalry with Beijing has become, and how politically lethal even a perception of reaching out to China is on both sides of the aisle in Washington.

"Regardless who is elected, the structural tensions are an undeniable reality and have become a widely accepted bipartisan consensus within the U.S.," said Henry Huiyao Wang of the Beijing-based Center for China and Globalization think tank.

China policies of either Trump or Harris administrations “will likely be strategically consistent," said experts from Peking University, Wang Jisi, Hu Ran, and Zhao Jianwei in their article in Foreign Affairs.

"As presidents, both candidates would present challenges and disadvantages for China, and neither seems likely to want a major military conflict or to cut off all economic and societal contacts," they said, adding that because of that, "Beijing is unlikely to have a clear preference."

Investing.com-- Bitcoin rose to a record high on Wednesday as early vote counting showed Donald Trump well ahead in the 2024 presidential elections, boosting hopes for more friendly regulation.

The world’s biggest cryptocurrency surged nearly 10% to a record high of $74,847.2. 

Broader crypto prices also rallied, with world no.2 crypto Ether rising 9.1% to $2,622.90.

Crypto prices shot up sharply after vote counting as of 22:10 ET (03:10 GMT) showed Trump in the lead with 198 electoral votes, while Kamala Harris held 109 votes.

Coverage by the Associated Press showed Trump was also leading in battleground states Pennsylvania, Arizona, North Carolina and Wisconsin. 

Crypto markets cheered the prospect of a Trump presidency, given that he has maintained a largely pro-crypto stance in campaigning, and has also promised to enact friendly regulation for the industry. 

By Bianca Flowers, Nathan Layne, Timothy Aeppel and Joseph Ax

ATLANTA (Reuters) -Republican Donald Trump won 15 states in Tuesday's U.S. presidential election while Democrat Kamala Harris captured seven states and Washington, D.C., Edison Research projected, but the contest remained undecided with critical battleground states unlikely to be called for hours or even days.

The early results were as anticipated, with the contest expected to come down to seven swing states: Arizona, Georgia, Michigan, Nevada, North Carolina, Pennsylvania and Wisconsin. Opinion polls showed the rivals neck and neck in all seven going into Election Day.

As of 9:30 p.m. ET (0230 GMT on Wednesday), polls had closed in 41 states and Washington, D.C. Trump had 162 electoral votes to Harris' 81 electoral votes, but both still had multiple paths to victory. A candidate needs a total of 270 votes in the state-by-state Electoral College to claim the presidency.

Decision Desk HQ projected Trump would win North Carolina, but other media outlets and Edison had yet to call the race.

In Georgia, Trump had opened up a 52.3% to 47.1% lead with 77% percent of the estimated vote tallied, according to Edison.

Control of both chambers of Congress is also up for grabs. Democrats had only a narrow path to defend their Senate majority after Republican Jim Justice flipped a West Virginia seat on Tuesday. The House of Representatives looked like a toss-up.

In Florida, a ballot measure that would have guaranteed abortion rights failed to reach the 60% threshold needed to pass, according to Edison, leaving a six-week ban in place. Nine other states have abortion-related measures on the ballot.

Nearly three-quarters of voters say American democracy is under threat, according to national exit polls from Edison, underscoring the depth of polarization in a nation where divisions have only grown starker during a fiercely competitive race.

Trump employed increasingly apocalyptic rhetoric while stoking unfounded fears that the election system cannot be trusted. Harris warned that a second Trump term would threaten the underpinnings of American democracy.

Hours before polls closed, Trump claimed on his Truth Social site without evidence that there was "a lot of talk about massive CHEATING" in Philadelphia, echoing his false claims in 2020 that fraud had occurred in large, Democratic-dominated cities. In a subsequent post, he also asserted there was fraud in Detroit.

"I don't respond to nonsense," Detroit City Clerk Janice Winfrey told Reuters.

A Philadelphia city commissioner, Seth Bluestein, replied on X, "There is absolutely no truth to this allegation. It is yet another example of disinformation. Voting in Philadelphia has been safe and secure."

Trump, whose supporters attacked the U.S. Capitol on Jan. 6, 2021, after he claimed the 2020 election was rigged, voted earlier near his home in Palm Beach, Florida.

"If I lose an election, if it's a fair election, I'm gonna be the first one to acknowledge it," Trump told reporters.

His campaign has suggested he may declare victory on election night even while millions of ballots have yet to be counted, as he did four years ago. The winner may not be known for days if the margins in battleground states are as slim as expected.

Millions of Americans waited in orderly lines to cast ballots, with only sporadic disruptions reported across a handful of states, including several non-credible bomb threats that the FBI said appeared to originate from Russian email domains.

Trump was watching the results at his Mar-a-Lago club before speaking to supporters at a nearby convention center, according to sources familiar with the planning. Tesla (NASDAQ:TSLA) CEO Elon Musk, a prominent Trump backer, said he would watch the results at Mar-a-Lago with Trump.

Trump attended a morning meeting about turnout but appeared bored by the data talk, according to one source briefed on the meeting. All Trump wanted to know, the source said, was: "Am I going to win?"

Harris, who had previously mailed her ballot to her home state of California, spent some of Tuesday in radio interviews encouraging listeners to vote. Later, she was due to address students at Howard University, a historically Black college in Washington where Harris was an undergraduate.

"To go back tonight to Howard University, my beloved alma mater, and be able to hopefully recognize this day for what it is, is really full circle for me," Harris said in a radio interview.

ABORTION, ECONOMY AND IMMIGRATION

Tuesday's vote capped a dizzying race churned by unprecedented events, including two assassination attempts against Trump, President Joe Biden's surprise withdrawal and Harris' rapid rise.

No matter who wins, history will be made.

Harris, 60, the first female vice president, would become the first woman, Black woman and South Asian American to win the presidency. Trump, 78, the only president to be impeached twice and the first former president to be criminally convicted, would also become the first president to win non-consecutive terms in more than a century.    

In Dearborn, Michigan, Nakita Hogue, 50, was joined by her 18-year-old college student daughter, Niemah Hogue, to vote for Harris. The daughter said she takes birth control to help regulate her period, while her mother recalled needing surgery after she had a miscarriage in her 20s, and both feared Republican lawmakers would seek to restrict reproductive healthcare.

"For my daughter, who is going out into the world and making her own way, I want her to have that choice," Nakita Hogue said. "She should be able to make her own decisions."

At a library in Phoenix, Arizona, Felicia Navajo, 34, and her husband Jesse Miranda, 52, arrived with one of their three young kids to vote for Trump.

Miranda, a union plumber, immigrated to the U.S. from Mexico when he was four years old, and said he believed Trump would do a better job of fighting inflation and controlling immigration.

"I want to see good people come to this town, people that are willing to work, people who are willing to just live the American dream," Miranda said.

By Wayne Cole

SYDNEY(Reuters) -U.s. stock futures and the dollar climbed in Asia on Wednesday as early results from the U.S. presidential election suggested the race remained too close to call, leaving investors jumping at shadows.

Republican Donald Trump won eight states while Democrat Kamala Harris captured three and Washington, D.C., Edison Research projected, but critical battleground states were unlikely to be called for hours or even days.

Treasury yields climbed as some betting sites swung to favour Trump, while futures markets were still confident the Federal Reserve will cut interest rates by 25 basis points on Thursday.

Analysts generally assume Trump's plans for restricted immigration, tax cuts and sweeping tariffs if enacted would put more upward pressure on inflation and bond yields, than Harris' centre-left policies.

Trump's proposals would also tend to push up the dollar while potentially restricting how far the Fed might ultimately be able to cut rates. Reflecting that, Fed fund futures for next year eased into the red with November off 7 ticks.

"As the early results come in, even though none of them are that surprising, we are seeing Treasury yields rising a little bit, the dollar strengthening, bitcoin up; kind of a classic Trump trade," said Brian Jacobsen, chief economist at Annex Wealth Management.

"There's not a lot of conviction in these moves; it seems like these are little pops."

Yields on 10-year Treasury notes rose to 4.351%, from 4.279%, and nearer a four-month high of 4.388% touched last week. Two-year yields climbed to 4.241%, from 4.189% late in New York.

"If we look at the long end of the curve, that reflects the fact that both candidates are not exactly fiscal conservatives, they're both willing to use the fiscal printing press," said Arnim Holzer, global macro strategist at Easterly EAB Risk Solutions.

"The biggest issue is if Trump or Harris are going to get full mandates," he added. "If they don't get blue or red sweeps, it limits the fiscal damage, and that's the best outcome for bondholders."

YUAN GIVES GROUND

S&P 500 futures gained 0.6% in choppy trading, while Nasdaq futures added 0.3%. EUROSTOXX 50 futures firmed 0.2%, while DAX futures tacked on 0.4% and FTSE futures 0.3%.

MSCI's broadest index of Asia-Pacific shares outside Japan was little changed. Japan's Nikkei rose 1.2% as the yen slipped, tracking rallies on Wall Street overnight. [.N[]

In currency markets, the dollar index added 0.8% to 104.19. The euro slipped 0.8% to $1.0834, having hit a one-month top of $1.0937 overnight.

The dollar firmed 0.8% to 152.86 yen, and further away from a low of 151.34. [USD/]

The dollar gained 0.5% on the offshore yuan to 7.1375 yuan. China is seen on the front line of tariff risk, and its currency in particular is trading on tenterhooks with implied volatility against the dollar around record highs.

Chinese stock markets have surged to almost one-month highs as investors expect a meeting of top policymakers in Beijing this week to approve local government debt refinancing and spending. Chinese blue chips dipped 0.2% in early trade on Wednesday.

A firmer dollar combined with higher bond yields left gold prices little changed at $2,744 an ounce and off a recent record peak of 2,790.15. [GOL/]

Oil prices were down in early Asia trade as markets nervously waited on the U.S. election results. They had risen overnight as a storm was expected to cut U.S. output in the Gulf of Mexico. [O/R]

U.S. crude lost 23 cents to $71.66 per barrel, while Brent fell 39 cents to $75.14.

By Joe Cash and Laurie Chen

BEIJING (Reuters) - Fears of a widening tariff war between China and other major exporting nations are keeping diplomacy between the world's second-largest economy and the European Union alive, even as trade talks over electric vehicles stall.

While the U.S. election on Tuesday is almost certain to result in more American curbs on Chinese goods, European negotiators are investing in a longer game that may yield no immediate resolution but would at least stop an escalating trade conflict.

Some EU member states are even using the dispute to bolster bilateral ties away from the Brussels-Beijing negotiations and attract fresh investment from China.

"I don't think China wants this thing to significantly torpedo the EU-China relationship, especially given the fact we will probably be seeing a very different world (after the U.S. election)," said Bo Zhengyuan, a Shanghai-based partner at Plenum, a consultancy.

New EU tariffs of up to 45.3% on Chinese EV imports came into effect last week after a year-long investigation that divided the bloc and prompted retaliation from Beijing.

Brussels maintains that Beijing doles out unfair subsidies to its auto industry and refuses to accept China's counter-offer of minimum import prices. Beijing hit back with probes into Europe's pork and dairy industries and imposed curbs on brandy imports.

Beyond the headlines, however, is a more complicated series of negotiations.

Beijing has in recent months hosted a procession of official visits from the EU and its member states.

A French junior trade minister is visiting Shanghai this week, with Paris keen to continue developing commercial ties in China's financial capital.

France is also a "Country of Honour" at China's annual flagship import expo, despite Beijing having placed retaliatory import tariffs on its brandy.

While little progress has been made in even approaching a resolution, engagement remains a priority, analysts say.

"I am not terribly optimistic that the Chinese side will put anything on the table that the EU will accept, but I probably should also be curbing my pessimism a bit, and would not discount a solution," said Max Zenglein, chief economist at Merics, a Berlin-based China studies institute.

"I am sure certain member states will be pushing for this to demonstrate their willingness or ability to work out a deal."

A DIVIDED UNION

As Washington steps up its curbs on Chinese products, Beijing is wary of broader damage to its trade ties with the EU, worth $783 billion last year.

For its part, the EU is conscious of widening the division the tariffs have already created among its members.

Among the bloc's 27 member states, 10 voted for the tariffs, five voted against and 12 abstained. Germany, Europe's biggest economy, was among the dissenters.

"The definitive lack of a majority against the tariffs meant that some countries' 'no' votes were symbolic," one European diplomat said.

"Some EU countries want more in-country investment from China and hoped for less retaliation by not voting for the tariffs outright," they added.

Slovakian Prime Minister Robert Fico is the latest European leader to visit Beijing, seeking deeper two-way trade and investment ties as insurance against a wider fallout with China.

Finland, which abstained, last week also agreed to deepen commercial ties with China during a visit by President Alexander Stubb, following Spain's and Italy's lead.

CONSTRUCTIVE MUDDLE-THROUGH

China has incentives to contain the dispute: Its economy is slowing and it needs to find buyers for its EVs to ward off deflationary pressures.

European diplomats, veterans in complex multilateral negotiations that can take years to iron out, said it was clear Beijing wanted to avoid a trade war, but it only started talks with Brussels relatively late in the process.

While both China and the EU have launched challenges against each other at the World Trade Organization, that arbitration could take years.

"Chinese action on brandy, pork and dairy imports from the EU is probably baked in at this point," said Noah Barkin, senior advisor at Rhodium Group.

"A win for the EU would be Beijing limiting its response to brandy, pork and dairy, and then both sides hashing it out at the WTO," he added.

Barkin warned a less contained response could see China curb EU access to the critical raw materials it needs for a green energy transition.

During his visit to China in September, Spanish Prime Minister Pedro Sanchez said Spain would seek to resolve the EV dispute within the WTO.

While that would signal a failure of bilateral talks, it would head off a worsening in relations.

"I think there is a chance they will come to some agreement, regarding the minimum prices, but this will not lead to the removal of the tariffs, just a readjustment of the rates," said Plenum's Bo on EU talks. "That is probably the best outcome."

SEOUL (Reuters) - South Korea has ordered Facebook owner Meta Platforms (NASDAQ:META) to pay 21.62 billion won ($15.67 million) in fines after finding it had collected sensitive user data and given it to advertisers without a legal basis, Seoul's data protection agency said.

The U.S. tech giant obtained information from about 980,000 South Korean Facebook users on issues such as their religion, political views and sexuality while failing to seek agreement from users, the Personal Information Protection Commission said in a statement on Tuesday.

The information was then used by some 4,000 advertisers, the agency said.

A Meta Korea official declined to comment.

"Specifically, it has been found that (Meta) analysed user behaviour data such as pages they liked and advertisements they clicked on Facebook and created and managed advertising themes related to sensitive information," the commission said.

This included users being categorised for example as being North Korean defectors, following a certain religion, or identifying as a transgender or gay person, the agency said.

Meta had also unfairly declined a request by users to access personal information and failed to prevent data on about 10 South Koreans from being leaked by hackers, the agency said.

($1 = 1,379.5200 won)

By Nandita Bose and Steve Holland

PHILADELPHIA/GRAND RAPIDS, Michigan (Reuters) - Donald Trump and Kamala Harris both predicted victory as they campaigned across Pennsylvania and other battleground states on Monday in the final, frantic day of an exceptionally close U.S. presidential election.

The campaign has seen head-spinning twists: two assassination attempts and a felony conviction for Republican former President Trump, and Democratic Vice President Harris' surprise elevation to the top of the ticket after President Joe Biden, 81, dropped his reelection bid under pressure from his own party. More than $2.6 billion has been spent to sway voters' minds since March, according to AdImpact, an analytics firm.

Nevertheless, opinion polls show Trump, 78, and Harris, 60, virtually even. The winner may not be known for days after Tuesday's vote, though Trump has already signaled that he will attempt to fight any defeat, as he did in 2020.

Both candidates converged on Pennsylvania on Monday to urge supporters who have not yet cast their ballots to show up on Election Day. The state offers the largest share of votes in the Electoral College of any of the seven battleground states expected to determine the outcome.

Trump campaigned in North Carolina, Pennsylvania and Michigan on the final full day of the campaign and was due to return to his home in Palm Beach, Florida, to vote and await election results.

Harris scheduled five campaign stops in Pennsylvania, including two cities where Trump also visited, Reading and Pittsburgh.

She ended the day in Philadelphia with a star-studded event at the "Rocky steps" of the Philadelphia Museum of Art, the site of a famous scene from the movie "Rocky."

By Tom Westbrook

SINGAPORE (Reuters) - Stock markets moved sideways and an uneasy calm settled over currencies and bonds as investors waited for the United States to choose a new leader with polls showing the contest on a knife edge.

Oil held sharp overnight gains on delays to producers' plans for increased output, leaving benchmark Brent crude futures at $75.08 a barrel after a 3% rise on Monday.

MSCI's broadest index of Asia-Pacific shares outside Japan was flat. Tokyo's Nikkei returned from a holiday and rose 1.3% in morning trade.

S&P 500 futures ticked 0.1% higher.

The dollar, which had eased overnight as traders made final adjustments to positions, bought 152.35 yen and traded at $1.0875 per euro.

"They've priced what they think is price-able and that's that," said Westpac strategist Imre Speizer, adding that a clear win for Republican Donald Trump would lift the dollar, while a win for Democrat Kamala Harris would push it a little lower.

Election day ends an acrimonious campaign jolted by assassination attempts on Trump and the withdrawal of President Joe Biden in favour of Harris, with polls showing the candidates virtually tied.

Markets are on edge about how Trump's protectionist trade policies in particular could stoke inflation and hit exports in the world's biggest consumer market with bonds and the dollar expected to move on the outcome of the election.

"Ultimately the U.S. election comes down to this - whether the U.S. electorate wants to vote for economic policy continuity, institutional stability and liberal democracy (Harris) or radical trade policy, a further retreat for globalization and strongman democracy (Trump)," J.P. Morgan analysts said in a note. "In short, a vote for stability or change."

BRACED

China is seen on the front line of tariff risk and the currency in particular is trading on tenterhooks with implied volatility against the dollar at record highs.

The yuan hovered at 7.1065 per dollar, while broader foreign exchange markets were steady. Traders kept one eye on a Reserve Bank of Australia rate decision, due at 0330 GMT, though no policy change is expected and most are keeping to the sidelines in order to trade quickly on election results.

The Australian dollar held at $0.6590. [AUD/]

"Simply, if Harris wins, we like selling dollar/yen and buying AUDUSD," said currency strategists at Citi. "If Trump wins, we like buying USD against EUR, SEK, and NOK."

Treasury markets, which have also priced in a U.S. interest rate cut for Thursday, held their ground in Asia with 10-year U.S. yields at 4.30%.

Bitcoin, which is seen as a beneficiary of a softer regulatory environment should Trump win office, has sold from recent highs and was steady at $67,924 on Tuesday.

When results roll in after midnight GMT the focus will be on battleground states of Georgia, North Carolina, Pennsylvania, Michigan, Arizona, Wisconsin and Nevada.

A winner may not be known for days and Trump has signalled that he will attempt to fight any defeat, as he did in 2020.