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Mid-session mid-terms

Asia Pacific stocks are looking at a positive start to a session that could end anywhere. Results from the US mid-term elections will start arriving later this morning. Local investors and traders will look to the US dollar and out-of-hours index futures for a guide to the impact of any change in control of the US Congress. Japanese wage data and a stronger than expected quarterly result from Australia’s Commonwealth Bank may add to early buying.

Currency markets are calm, with the exception of a strengthening British pound. However industrial commodities are pointing to ongoing growth concerns. Base metals and energy markets slid further overnight, and European exchanges appeared more in tune with these concerns. Continental investors left indices in the red.

As east coast polling stations close at 6 pm results will start to dribble through. The recent inaccuracy of exit polls may mean markets will delay responses until later in the Asia Pacific trading day. It’s argued that US markets have priced Democrats taking control of the lower house while Republicans may strengthen their grip on the senate. Whether this is the case, or denial and complacency are at work, will determine potential responses.

Australia’s largest listed company reported a steady quarter. Commonwealth Bank management told investors the bank made a cash profit of $2.5 billion and its balance sheet remain strong. Although margins fell and impairment rose, the result appears better than expected and may see opening gains for CBA today.

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