The US Presidential elections are approaching. On November 2 (or before by mail) US citizens will choose a president. The most likely outcome is that Biden wins the presidency and this result is set to benefit the commodity market, strategists at ABN Amro reports.
Key quotes
“We expect that Democratic policies would probably result in a considerably stronger US economy in the coming years. This is positive for commodities in general overall, especially if Chinese growth is resilient.”
“We also expect US real rates to remain negative or to decline further in 2021. This supports commodity prices due to the historical negative relationship between the two.”
“The dollar will probably be supported in the nearterm (= downside price risk dollar-denominated commodities) but we expect weakness in 2021. Some near-term weakness in commodity prices will likely result in higher prices afterwards.”
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