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Traders are advised to brace for significant market movements as the US election approaches, with Donald Trump and Kamala Harris neck-and-neck in key battleground states. UBS analysts suggest using potential market overreactions to strengthen long-term portfolios, highlighting opportunities in equities, bonds, and gold. Despite expected volatility, they maintain a positive outlook for US equities, projecting a 15% gain by the end of next year.
UBS analysts express a "constructive outlook" for global equities, driven by positive US economic data, Chinese stimulus measures, and potential global interest rate cuts. They highlight opportunities in US technology stocks and expect significant growth in Asia ex-Japan and European small- and mid-cap equities.
Oil market fundamentals are bearish, with UBS analysts noting that easing geopolitical tensions and weaker demand from China have dampened price outlooks. The forecast for global oil demand growth in 2024 has been lowered, while US production faces challenges from declining rig activity. OPEC+ supply is not expected to increase until at least 2027, as weak demand and rising non-OPEC+ production continue to dominate the market.
Gold prices have surged to a record high, reaching $2,706 per troy ounce, with analysts at UBS predicting a rise to $2,900 by September 2025. This increase is driven by falling interest rates, strong central bank purchases, and ongoing demand for safe investments amid global uncertainties. Political factors and monetary easing from central banks, including the European Central Bank's recent rate cuts, are expected to further support gold prices in the coming weeks.
The U.S. dollar has strengthened ahead of the presidential election, driven by improved polling for Republican candidate Donald Trump, which is expected to favor the dollar due to potential aggressive tariff policies. Analysts predict a short-term boost for the dollar, although year-end forecasts suggest a slight decline from current levels. Meanwhile, the market anticipates a 25 basis point rate cut from the ECB, with the EUR/USD pair particularly sensitive to U.S. developments.
Chinese equities are expected to remain volatile as investors react to the government's recent fiscal stimulus package, which has left many disappointed due to a lack of specific details on implementation. Analysts warn that if the measures fail to meet expectations, the market could face further declines. Despite initial optimism that drove indices to two-year highs, concerns over sluggish economic growth and deflation persist, with the government struggling to meet its GDP target for 2024.

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