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Wall Street stock futures dip as investors look to U.S. elections

Reuters  |  TOKYO 

By Hideyuki Sano

TOKYO (Reuters) - Wall Street stock futures ticked down slightly while Asian shares held very tight ranges early Wednesday as investors awaited the results of U.S. midterm elections, which could see Republicans lose their grip on

U.S. S&P500 futures dipped 0.25 percent as the first polls closes in parts of the country in the congressional elections, seen as a referendum on Donald Trump's polarising style and "America First" policies.

MSCI's broadest index of shares outside <.MIAPJ0000PUS> was flat in early trade while Japan's Nikkei <.N225> ticked up 0.2 percent.

Voter turnout in national elections, normally lower when the presidency is not at stake, could be the highest for a midterm election in 50 years.

The opposition Democrats are favoured by election forecasters to pick up the 23 seats they need to gain a majority in the House, but have slimmer chances of gaining control of the Senate, opinion polls show.

"We, like many other market players, expect Democrats to take the House and to have a split That should mean Trump won't be able to push for further tax cuts and could lead to a risk-off mood in markets," said Masahiro Ichikawa, at

"But that is probably already factored in, so I would think any additional selling in stocks would be limited," he said.

Many investors also expect Trump to continue to take a hard line on tariffs, which he can impose without Congressional approval. That keeps alive worries about a trade war between and the

Trump's massive tax cut, enacted in December, and a spending agreement reached in February have helped lift the U.S. economy, but they have also widened U.S. federal budget deficit.

As a result, Treasury supply has been growing, pushing U.S. bond yields higher.

The 10-year U.S. Treasuries yield stood at 3.211 percent , near its seven-year high of 3.261 percent touched a month ago, as investors sold ahead of this week's record amounts of longer-dated government debt supply.

prices were soft after a 2 percent fall the previous day, with U.S. crude futures hitting an eight-month low as granted sanction waivers to top buyers of Iranian and as said it has so far been able to sell as much as it needs to.

U.S. Intermediate (WTI) crude futures traded down 0.7 percent at $61.79 a barrel having hit a low of $61.31 on Tuesday, the weakest price since March 16.

Major currencies hardly budged with the euro little changed at $1.1420 , holding about one cent above this year's low of $1.1301 touched on Aug. 15.

The yen changed hands at 113.41 per dollar, after hitting a one-month low of 113.505 on Tuesday.

The British pound hit a three-week high of $1.3111 on Tuesday and last stood at $1.3104, helped by hopes of a Brexit deal breakthrough after said "Thumbs Up" on his way out of a cabinet meeting.

That helped sterling recover losses following remarks from a of the Northern earlier that it looked like Britain would exit the EU without a deal.

(Reporting by in Tokyo; Editing by Sam Holmes)

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Wed, November 07 2018. 06:04 IST
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