NEW YORK (Reuters) - U.S. short-term interest rates futures were slightly lower on Tuesday as traders wait on U.S. election results with the focus on the presidential race between Democratic nominee Hillary Clinton and Republican candidate Donald Trump.
Traders are also paying attention to a slew of Congressional contests, which would determine whether Democrats would take control of the Senate and Republicans would maintain their majority in the House of Representatives.
The outcome of these races would shape traders' view on U.S. trade and fiscal policies, together with the possible composition of the Federal Reserve Board.
"There’s not much to say ahead of the election as it will be the markets’ sole focus today and tomorrow," said Ellis Phifer, market strategist at Raymond James in Memphis, Tennessee.
Polls showed Clinton's lead over Republican rival Donald Trump narrowed after FBI Director James Comey sent a letter to Congress in late October saying the agency would examine newly found emails that might pertain to Clinton's use of a private server while she was secretary of state.
On Sunday, the FBI said Clinton would not face formal charges after a review of these emails.
Comey's first letter stoked controversy over Clinton's use of a private email server while secretary of state, causing traders to downgrade her chances to win the White House.
A Trump win has worried some investors given his comments about trade and immigration, which they see as protectionist and would damage the U.S. economy and financial markets.
Some traders have speculated that if Trump were to capture the presidency, causing tremendous market turmoil, the Federal Reserve may refrain from raising interest rates at its Dec. 13-14 policy meeting.
Sunday's FBI news is viewed as supportive to a Clinton win, which ignited purchases of stocks and other risky assets worldwide. U.S. stocks booked their largest single-day percentage gain since March 1 on Monday.
Clinton has a 90 percent chance of defeating Trump, according to the final Reuters/Ipsos States of the Nation poll released on Monday.
Federal funds futures were down 0.5 basis point to 1.0 basis point from Monday.
They implied traders saw about a 76 percent chance the Fed would raise rates next month, compared with 72 percent late on Monday, according to CME Group's FedWatch program. <FFZ6>
(Reporting by Richard Leong)