Asian shares rose on Wednesday, and the dollar fluctuated as investors awaited US inflation data and the outcome of the US midterm elections, which could signal a power shift in Washington.

MSCI’s broadest Asian-Pacific shares outside Japan were up 0.45%, Japan’s Nikkei was up 0.2%, and Australian shares were up 0.7%. Chinese stocks opened flat, with Hong Kong’s Hang Seng up 0.12%.

Chinese stocks surged last week on hopes that the country’s authorities would ease their zero-COVID policy, but rising COVID-19 cases tempered expectations.

Meanwhile, Chinese factory gate prices fell in October for the first time since December 2020, underscoring weak domestic demand and production disruptions amid strict COVID-19 measures and a sluggish property sector. The three major US stock indexes rose on Tuesday for a third session.

The US midterm elections will determine whether Democrats lose or retain control of Congress during Joe Biden’s presidency, with investors expecting gains from Republicans.

Republicans typically tend to gain the five seats needed to control the House, but control of the Senate could come down to a tight race in several states.

A divided Congress will dent prospects for fiscal support measures, leading investors to expect the Fed to be less aggressive in raising interest rates in the near term, strategists at Saxo Markets wrote. They added that such an outcome could spark a rally in stocks and put downward pressure on the dollar.

Historically, stocks have tended to perform better in divided governments when Democrats are in the White House, with investors attributing some of the performance to the political gridlock that has prevented both sides from making major policy changes.

Preliminary results showed several Republican senators easily won re-election, but the final result may not be known anytime soon.

In the cryptocurrency space, Bitcoin fell nearly 1% on Wednesday after cryptocurrency exchange Binance announced it had signed a non-binding agreement on Tuesday to acquire rival exchange FTX in response to a marked liquidity crunch.

US inflation data on Thursday will also catch investors’ attention, with economists forecasting monthly and annual core readings to fall to 0.5% and 6.5%, respectively.

Fed funds futures see a 67% chance of a 50-basis point hike in December and a 33% chance of a 75-basis point hike.

In currency markets, the dollar has been under pressure from bets that the Federal Reserve will ease rate hikes and China’s reopening and boost economic growth.

The dollar was last at $1.1006 against the euro, buying 145.20 yen. Oil prices were little changed in early trade Wednesday after falling 3% in the previous session on demand concerns. US crude was last down 0.01% at $88.90 a barrel, while Brent was at $95.40, up 0.04% on the day.