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Markets cheer prospects of not a contested election as Biden is on track to win three states that could send him to the White. Split Congress risks derailing the rally, but a final call could wait for January, FXStreet’s Analyst Yohay Elam reports.

Key quotes

“Democratic candidate Joe Biden has improved his position according to the recent count. The former Vice-President is leading in narrow margins in Wisconsin, Michigan, and Nevada. The margins in these three states are below 1%, but the remaining votes are from cities or from mail-in votes – which tend to lean toward the Democrats. The race in Nevada’s neighbor Arizona is all but wrapped up. Biden leads there by 3.4% with 86% of the votes counted. Tallying up the electoral college votes from these four states brings Biden to the magic number of 270, a majority to secure a White House victory. That may happen as early as Wednesday, and betting markets are already heavily leaning toward such an outcome.” 

“The count in Pennsylvania is only at 76% and Trump is leading thereby over 10%. However, authorities still need to tally Democratic-leaning Philadelphia and mail-in ballots. The president is also leading in North Carolina by 1.4%, yet the Tar-Heel State allows ballots to arrive by November 12. Georgia holds a similar story – Trump is up by 2.2% but votes from Atlanta are yet to be fully tallied. The Peach State also features two Senate battles.”

“Markets seem to be getting comfortable with adding ‘president-elect’ as Biden’s title. Investors are eyeing a large stimulus package, and Biden would likely push for a larger one. However, without Democratic control of the Senate, he may have a hard time approving anything. Currently, the GOP seems well-placed to retain control of the Senate, yet that hinges on North Carolina and Georgia, with the latter potentially holding two run-offs in January.”

“If a Republican win of the Senate is confirmed, markets may come off their highs. Nevertheless, that may wait for a cold day in 2021. In 2020 – and more likely in a matter of hours, Biden could be confirmed as the 46th President, and investors are cheering a relatively early resolution.”