The dominant macro driver overnight was the US midterm election result, which delivered a Democratic sweep of both the House and Senate, reducing the most extreme policy tail-risks while introducing new regulatory headwinds for AI and data-centre infrastructure. Oil prices cratered — Brent fell roughly 8.7% to $94.62 and WTI dropped 8.3% to $88.12 — on hopes that the new congressional composition could encourage de-escalation in the Middle East and ease pressure on Iran-related supply fears. Gold surged 3.4% to $4,073/oz and Bitcoin topped $80,000, reflecting a broad flight into inflation hedges and risk assets simultaneously, an unusual but election-driven cross-asset dynamic. The VIX fell 1.5% to 20.83, and the Nikkei VIX collapsed 30%, signalling a sharp relief rally in implied volatility globally.
For the US session today, the cross-asset message is mixed but broadly constructive at the index level, with technology and communication services leading sector performance while energy, materials, and consumer staples lagged sharply. Treasury yields have risen — the 10-year climbed 4bp to 4.95% and the 30-year hit 5.32% — suggesting bond markets are not fully buying the disinflation narrative from lower oil, and the spread widening between 2s and 10s warrants attention for rate-sensitive sectors. The Bank of England decision at 07:00 ET, expected to deliver a 25bp hike to 4.00% with a 7-0-2 vote split, will set early tone for sterling and global rate expectations before the US open, while ECB President Lagarde speaking at 13:00 ET and weekly US jobless claims at 08:30 ET round out a data-heavy morning that could reset positioning ahead of the weekend.