Asian markets were given a boost from the middle of the past week on positive earnings reports from Wall Street and developments in US-China trade relations.
But as markets head into the first full week of November, all eyes will be on political developments in the United States, with the midterm elections tomorrow.
Said FXTM global head of currency strategy and market research Jameel Ahmad: "Any optimism that political risk will take a backseat from influencing financial market movements (this week) will likely be faint, when you consider that the largest political risk event of 2018 is now just days away.
"The US midterm elections are arguably something that financial markets have overlooked when you consider the number of different external uncertainties that have caught the attention in recent weeks."
Polls suggest the Democrats will win a majority in the House of Representatives but the Republicans will retain control of the Senate.
However, in the event of an upset, where Democrats take both chambers of Congress, the expectations will be for more legislative gridlock due to bipartisan politics at play.
On the US midterms, IG market analyst Pan Jingyi said: "The intuitive response towards such an outcome, which interestingly had been shown to be a base case scenario in polls, will be a slump for the US dollar. The equity market, meanwhile, may not be significantly afflicted.
"In the light of the uncertainty as to when the narrowed results could arrive, traders will likely be on standby" from the close of the US elections, she added.
Mr Ahmad said: "Emerging market currencies in particular will be seen as the most sensitive to such a political event. Their best chances of regaining strength against the greenback (rest) on increasing expectation that the Trump administration might lose some political influence in the midterm elections."
In Singapore, the earnings season continues to take centre stage with many Straits Times Index constituents releasing their earnings results for the past quarter this week. Among them are DBS' third-quarter report today and Yangzijiang Shipbuilding's third-quarter results on Wednesday.
Meanwhile, Thursday will be an exceptionally busy day with Singtel, Genting Singapore and City Developments due to report earnings for the past quarter.
A slew of economic data releases for October will be out this week in China. Among them are today's Caixin October services purchasing managers' index, foreign reserves figures on Wednesday, trade data on Thursday, and consumer price index and producer price index figures on Friday.
Other than China, Malaysia (today), Taiwan (Wednesday), and the Philippines (Thursday) will also report their latest trade numbers this week.
Third-quarter gross domestic product (GDP) data for Indonesia and the Philippines are due today and on Thursday, respectively.
The Bloomberg consensus expects Indonesian GDP growth to slow slightly to 5.18 per cent year on year, while the Philippines' may accelerate to 6.3 per cent.
Among central banks, the Reserve Bank of Australia, the Reserve Bank of New Zealand and Bank Negara Malaysia are due to make monetary policy decisions this week. None of them are expected to change their respective policy rates.
US-listed companies will continue to report earnings while in Europe, Britain's third-quarter GDP data will be out on Friday.
Markets in Singapore and Malaysia will be closed tomorrow while Indian markets will be closed on Wednesday for the Deepavali holiday.
