Global Markets React to US Midterm Elections; ECB and Bank of France Maintain Cautious Stance Amid Inflationary Pressures

Global financial markets are experiencing volatility as early projections indicate a Democratic victory in the US midterm elections, impacting fiscal and regulatory policy expectations. In the Euro area, the European Central Bank (ECB) continues to express caution regarding persistent inflationary pressures, with ECB's Dimitar Radev warning that October's pause in rate hikes does not necessarily signal the end of the hiking cycle. Concurrently, the Bank of France has indicated a potential downgrade to its 2026 growth forecast following a contraction in French GDP during Q3. Oil and European natural gas prices have also seen declines, attributed to improved prospects for a diplomatic resolution to the conflict with Iran, including the potential reopening of the Strait of Hormuz.