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Analysts at Rabobank explain that while it’s debatable whether it’s a ‘wave’, the Democrats have taken the House of Representatives and the Republicans have kept their majority in the Senate in the aftermath of the US midterm elections.

Key Quotes

“The impact on the markets is relatively modest, as the vote turned out to be in line with predictions.”

“Foreign and trade policy is to a large extent the prerogative of the President, hence Trump will maintain considerable control, despite the Democratic majority in the House of Representatives. However, for the ratification of international treaties he will need the approval of the House Democrats.”

“In contrast, domestic policy is made in Congress, hence a Democratic majority in the House is likely to lead to gridlock. Infrastructure spending could be one of the few feasible policy options.”

“The midterm elections will not lead to the removal of President Trump through impeachment & conviction.”