Markets turn cautious while awaiting US Midterm Elections results. On one hand, volatility could rise once results become clearer. On the other hand, one could argue that the subject is not important to the FX market, economists at Commerzbank report. 

What really matters and what does not

“The results of the US midterm elections are beginning to come in one by one and the USD exchange rates are not moving. One might argue that this was the ‘calm before the storm’ and come to the conclusion that the realised USD volatility will be increasing once it becomes clear who will hold the majority in Congress.”

“However, one could also come to the conclusion that the subject is of little interest to the FX market and that it was only discussed so intensively in an FX context because writers had to fill the gap until the next really important event for the USD exchange rates came along (the US inflation data on Thursday).”