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President Trump and rival Biden clashed in a chaotic shouting match. Biden’s initial lack of sharpness may boost tighten the elections. Meanwhile, stocks are set to suffer on Trump’s refusal to accept the results, FXStret’s analyst Yohay Elam reports. 

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Key quotes

“While markets usually prefer Republican, pro-friendly presidents, they also prefer certainty. A tighter race adds to uncertainty. In the 2020’s case, it also increases the probability of an inconclusive election. Trump refused to say if he would accept the results. That opens the door to disputed elections and a constitutional crisis.”

“A disputed result could trigger a recount and be litigated, repeating the scenario in 2000, when Florida was eventually decided by 537 votes in Florida. However, 2020 could see the elections fought over on the streets. Late in the debate, Trump refused to condemn white supremacists and even mentioned one group by name. He asked them to ‘stand back and stand by’ – in what can be seen as a threat of violence.” 

“S&P futures are down in the wake of the debate and could continue deteriorating, regardless of what snap polls say about who won the acrimonious mud-slug.”

“The bad blood also lowers the odds of Congress agreeing on a new fiscal stimulus deal. The time window was already narrowing ahead of the vote and as both parties are set for a battle over nominating a Supreme Court Justice.”