The main reason why the global selloff occurs is because markets had already priced in the victory of Clinton in the US election. Especially after the three recent debates most investors and analysts believed the battle was over hence giving rise to risk appetite. However, after news surfaced that the FBI will re-open an inquiry into Clinton’s use of an e-mail server, polls showed that the race has become tight (some polls actually put Trump in the lead). Considering markets had already priced in a Clinton victory, every hint or sign of the opposite (namely a Trump victory) causes big movements in global markets.

The Mexican peso, which is now being regarded a proxy for investors’ expectations of who wins the US presidential race, has weakened more than 3 percent over the last three days. Trump has repeatedly stated that he wants to overhaul the US immigration policy and pledged to build "a wall" between Mexico and the USA.

Clinton is the clear market favorite as her agenda is more-or-less known and she has the characteristics of the traditional politician. Trump, on the other hand, has made many controversial statements (has a controversial character) and investors and analysts not really know what a Trump victory would imply for the direction of US economic policy, free trade deals and geopolitics.

Growing chances that Trump may enter the White House is currently causing a flight to safety, implying that emerging market assets come under pressure. According to data from RTI Infokom, foreign investors sold a total IDR 746.2 billion (approx. USD $57 million) worth of Indonesian stocks today. Especially energy stocks and consumer staples were victims on today's trading day. Meanwhile, Indonesia's rupiah depreciated 0.14 percent to IDR 13,075 against the US dollar (Bloomberg Dollar Index).

One of the popular safe haven assets is Japan's yen. The currency climbed to a one-month high on heightening concern about the US election. Usually, Japanese stocks drop if the yen strengthens as the benchmark Nikkei index is dominated by export-oriented shares. Today, however, Japan was closed for a public holiday.

Overnight, US stocks retreated for a seventh consecutive day, the market's longest decline in the past five years, on concern about the US presidential election. On Wednesday (02/11) the Dow Jones industrial average fell 0.4 percent, the Standard & Poor's 500 index lost 0.7 percent, while the Nasdaq composite fell 0.9 percent.