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In view of analysts at Danske Bank, with a divided US Congress, we should not expect changes to economic policy and hence they maintain their view that the implications for the economy and markets should be limited.

Key Quotes

“US expansion is set to continue.”

“Trump has criticised the Fed but it is likely to continue its hiking cycle by hiking once more this year and three times next year.”

“Democrats likely to start impeachment process but Trump is unlikely to be convicted.”

“We expect Trump to remain hawkish on foreign policy. Positive signs in US-China trade war lately with a 60% probability of a ceasefire.”

“The result is not a game changer for G10 FX markets. We still look for EUR/USD to move below 1.13 before year-end.”