It wasn't supposed to have played out this close at least
It is going to be a long night - or maybe even a few days - before we get an official verdict of who wins this race.
Among the six key swing states, Trump looks a heavy favourite to take Florida (94% reported) and pip North Carolina (93% reported). The others are a bit slower in reporting, but Arizona looks to be swinging to Biden comfortably.
Michigan, Pennsylvania and Wisconsin may only get clearer results as we head into the wee hours of the morning but be wary of a red mirage for the time being, though it could still very well end up being a sweep for Trump at the end of it all.
There's some good news for Biden in North Carolina with some reporting errors being found, but they may not prove to be enough to swing things in his direction unless the late mail-in ballots say otherwise (though Trump will surely contest that):
We have some good news for Democrats in North Carolina, where a reporting error by Randolph County is padding Trump by about 30k in our estimate there. They reported both in person (abs one-stop) and absentee mail together, but the needle's still expecting 45k early votes. We also have a similar case in Rockingham County, which is worth another net-10k to Biden--still leaving him quite a bit short. If we add a net-40K to Biden, Trump would still be a heavy favorite but the needle would no longer give Trump >95% chance, because it does still believe there are late mail ballots left to count over the next few days. — Nate Cohn (NYT)
Regardless of the developments, it wasn't supposed to have played out this way. The pollsters had this pinned as a blowout and instead, we're in for a much tighter race with Pennsylvania looking increasingly likely to be the tipping-point state this year.
Betting markets have flipped over to price in a Trump win and that looks highly plausible if he takes Pennsylvania as well, though there is still a possible scenario where Biden wins 270-268 - with the Arizona win proving to be his saviour.
That said, even if Biden wins by a fine margin, the pollsters will be more wrong this year than they were in 2016. A Trump victory will just cement their funeral.
As for markets, the dollar is the big winner on the night so far and that is largely due to the fact that the race is proving tighter than what the market gave it credit for.
The need to consider a Trump victory is also part of that, with a dollar rally largely anticipated to follow although I would argue that fading such a rally is the better trade when you assess the overall prospects of the dollar.
For equities, it is a win-win scenario - at least in the near-term - pretty much provided we don't get any major gridlock in Washington involving stimulus plans.
The Senate race is also heating up with Republicans and Democrats exchanging blows in Alabama and Colorado, but other more tightly contested states are yet to report a decisive winner yet on the night.
