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Full FBI Clinton fallout is up for debate, but markets cheer

© Justin Sullivan, Getty Images North America/AFP | Democratic presidential nominee Hillary Clinton laughs during a campaign rally at the Cleveland Public Auditorium on November 6, 2016, in Cleveland, Ohio

Text by Tracy MCNICOLL

Latest update : 2016-11-07

On the final day of a bitter US presidential campaign, the FBI is again in the spotlight after its statement Sunday that a review of emails linked to Hillary Clinton offered no new evidence for its inquiry into her use of a private server.

FBI Director James Comey sent shockwaves through a race Clinton appeared to have in hand when he told Congress on October 28, only 11 days before the election, that his agency was reviewing the emails of a top Clinton aide that might be “pertinent” to its investigation into Clinton’s use of a private email server while she was secretary of state.

Now, as the dust settles after the FBI’s controversial and unprecedented announcement in the final days of the US race, questions remain about the effects the agency’s October surprise might have on Tuesday’s election but global markets certainly rebounded on the news.

Nate Silver, a statistician and the editor-in-chief of respected election forecaster fivethirtyeight.com, wrote on Sunday that Clinton’s chances of winning the election had dropped to 65 percent from 81 percent on October 28.

But Silver tempered the urge to attribute the entirety of the drop to the FBI’s actions, noting that Clinton’s poll numbers may have been slightly inflated in mid-October, citing the fact that she may have been facing scrutiny over the WikiLeaks releases in any case and that Donald Trump had been comparatively disciplined on the campaign trail in recent weeks.

Soon after Comey’s shock email reveal, CBS News's Battleground Tracker data appeared to downplay the impact of his bombshell. Only 5 percent of Democrats in the 13 contested “battleground states” polled after the announcement said it would make them less likely to vote for Clinton, it wrote on October 30.

Clinton low on “trustworthiness” pre-FBI

CBS News also pointed out that Clinton had polled low on “honesty and trustworthiness” prior to the FBI’s announcement, even among many of her own voters. Those rating her on that score were at just “one-third in Pennsylvania [and] just 34 percent in North Carolina, states in which she leads despite those ratings and despite trailing Donald Trump on those ratings”, CBS News wrote.

But Clinton’s prospects of victory weren’t the only ones cast into question by the FBI’s eleventh-hour whammy. Fivethirtyeight’s Silver noted that Comey’s initial reveal may have affected down-ballot races ahead of Tuesday’s election. “Democrats’ chances of winning the Senate were generally hovering around 70 percent in late October. Today, they’re at 50 percent,” Silver wrote Sunday. “It doesn’t take a lot to swing the numbers in the Senate forecast because of the large number of competitive races – even a one-point swing toward Republicans because of higher turnout could affect the odds significantly,” he explained.

Observers agree that it is difficult to gauge the impact of the FBI’s moves on the election’s outcome. It bears noting, however, that Comey’s October letter appears to have spurred a change in the Clinton campaign's tactics.

The Washington Post noted Sunday that, prior to the FBI’s initial message on its e-mail discovery, Clinton “had been trying to expand the electoral map by focusing on red states that included Georgia and Arizona”. The newspaper said that after the FBI’s October 28th bombshell, the Democratic candidate “drew back to defend blue turf like Michigan and Pennsylvania. In those days, millions of votes were cast.”

What is clear is that, with Election Day only hours away, pollsters have little time to detect the full consequences of the FBI announcement before the remaining voters cast their ballots. Trump, for his part, appeared undeterred, not tweaking his “Crooked Hillary” rhetoric on Clinton after the FBI’s Sunday denouement.

“Hillary Clinton is the most corrupt person ever to seek the office of the presidency of the United States. The investigations into her crimes will go on for a long, long time. The rank-and-file special agents at the FBI won't let her get away with her terrible crimes," Trump told supporters at a rally Sunday in Sterling Heights, Michigan. "Hillary Clinton is guilty. She knows it. The FBI knows it. The people know it. And now it is up to the American people to deliver justice at the ballot box on November 8th," Trump said.

Indeed, Republicans may be reluctant to let go of the lifeblood of uncertainty created by Comey’s initial letter to Congress. Former house speaker Newt Gingrich took to Twitter on Sunday to suggest Comey’s latest announcement was made under duress.

Political pressure exerted?

“Comey must be under enormous political pressure to cave like this and announce something he can’t possibly know,” Gingrich tweeted. “The destruction of James Comey by political pressure is painful to watch. He is being twisted into an indefensible pretzel of contradictions.”

Clinton made no mention of the FBI’s closure of the new review in campaign appearances on Sunday in Ohio and New Hampshire, perhaps wagering that reminding voters of the FBI’s inquiry would do more harm than simply turning the page on it.

The Democrat’s press secretary, however, reacted on Twitter. “We were always confident nothing would cause the July decision to be revisited. Now Director Comey has confirmed it,” Brian Fallon tweeted, referring to the FBI’s initial July finding that Clinton would not be indicted over the long-standing e-mail controversy. “We’re glad this issue is resolved but for the record, this could easily have been learned before 1st letter was sent,” Fallon added.

While pollsters may not see the full brunt of Sunday’s FBI volte-face before the lights go out on the 2016 race, global financial markets quickly showed their confidence that it bodes well for Clinton’s prospects on Tuesday.

Global markets cheer the news

Markets broadly view Clinton as the status-quo candidate in stark contrast to the riskier Trump’s impulsive bluster, his stated desire to reopen long-standing trade agreements and his lack of a track record in government. Markets plunged after Comey’s October 28 letter.

The dollar surged overnight against the yen and the euro after the latest FBI announcement, while the Mexican peso rebounded as much as 2.5 percent to reach a 12-day high. The robustness of the peso is seen as a litmus test of Trump’s perceived electoral chances on views a Trump victory could harm the Mexican economy. The Republican candidate has pledged to jettison the North American Free Trade Agreement, deport undocumented migrants, and build a wall between the US and Mexico at the latter’s expense.

"A lot has happened overnight because of the news on the email, much of the Trump discount in the dollar has already come out," Stephen Gallo, head of European FX strategy with Bank of Montreal in London, told Reuters.

Paris and Frankfurt gained 1.7 percent Monday with London adding 1.3 percent in value. In the US, stocks jumped about 1.5 percent. The S&P 500 and Dow Jones Industrial Average both leapt 1.3 percent within the first minutes of trading Monday.

"European equity markets are... boosted by the news that the FBI has not changed its conclusion on the Hillary Clinton email investigation after announcing a little over a week ago that it had been reopened," Oanda analyst Craig Erlam told Agence France-Presse. "The timing of FBI Director James Comey's disclosure has once again dealt a serious blow to Donald Trump's chances of securing the White House, something the markets have responded very positively to," Erlam added.

As the clock winds down on a nasty 2016 campaign rife with surprises, it may be up to historians to sort out the impact of the FBI’s actions. All that matters now is Tuesday’s final result.

Date created : 2016-11-07

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