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ING analysts point out that in the US, House Democrats have called for President Trump to be impeached following reports that he withheld state aid to Ukraine before calling on Ukrainian President Volodymyr Zelensky to investigate the son of former Vice President Joe Biden.

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“The odds of Trump being removed from office (20 Republican Senator votes would be needed), or voluntarily leaving, are extremely low. President Trump thus remains set to be the Republican nominee in 2020, with his ability to win re-election reliant on a positive economy and the creation of any trade or foreign policy successes. After all, the latest developments make it even less likely there will be any bipartisan agreements in areas such as gun reform or infrastructure spending.”

“In terms of foreign policy, the ongoing dispute with North Korea remains unresolved while tensions with Iran have been heightened following the imposition of additional sanctions after explosions at Saudi ARAMCO facilities in mid-September. The trade conflict with China has also seen little progress in terms of de-escalation, with the US imposing $125 billion in new tariffs on 1 September. New talks are due in October but there is little optimism that a formal “deal” will be agreed.”

“Despite these challenges, the US economy remains relatively strong. There are clearly headwinds from weaker global growth and worries about geo-political tensions, but the domestic economy is robust for now and wages are rising. Equity markets have regained nearly all of their August losses and with mortgage rates hitting new cycle lows, households are confident in the outlook and willing to spend. It is a different story in the manufacturing heartlands with the ongoing threat that weakness here spreads more broadly within the economy.”