Bitunix Analyst: Midterms Become a Policy Watershed — Oil and Rate Expectations Face Recalibration

BlockBeats news, November 3 — The US midterm elections enter voting day, with political outcomes and US-Iran diplomatic progress jointly shaping global markets. Under Qatari mediation, indirect US-Iran contacts have continued. Iranian President Pezeshkian said the Supreme Leader has granted the government partial negotiating authority. Trump, for his part, said he is in no rush to decide whether to resume military strikes, adding that Iran wants a resolution soon. Diplomatic hope pushed Brent crude down more than 7% on Monday, as the market gave back part of the war risk premium.

However, no substantial breakthrough has yet been reached. After multi-day consultations between Iranian and Qatari representatives, a draft agreement is still being circulated, and follow-up meetings have yet to be scheduled. Both sides retain major disagreements over the nuclear program, lifting sanctions, and control of the Strait of Hormuz. Within the US, there are also competing stances — supporting a diplomatic agreement, resuming military action, and maintaining economic pressure. The oil pullback therefore reflects market expectations of de-escalation, not a removal of energy supply risk.

The US midterms are the next policy watershed. JPMorgan’s scenario analysis places the highest odds on a Democratic sweep of Congress, but a Republican hold of both chambers may actually produce a more positive short-term equity reaction. Historically, in the 11 midterms from 1982 to 2022, the S&P 500 rose within one year each time — with an average gain of about 13.7%. But historical seasonality cannot substitute for fundamentals.

Another policy signal came from Australia’s central bank, which hiked 25 basis points to 4.85% by a 6-3 vote — reflecting that energy costs and domestic capacity pressure still keep inflation risk elevated. The US Treasury lowered its Q4 borrowing estimate to $618 billion, but this reflects mainly a higher opening cash balance — excluding the cash factor, actual financing needs are in fact higher than the previous estimate. Overall, diplomatic progress helps lower the near-term energy risk premium — but inflation, fiscal financing, and post-election policy direction will still decide whether global financial conditions can genuinely improve.