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Analysts at Nordea Markets suggest that this week all eyes are on the mid-terms election and most political commentators consider it very unlikely that the Republicans will keep the majority in both chambers.

Key Quotes

“The consensus view is that Democrats will win back the majority in the House, will the Republicans will keep the slim Senate-majority intact.”

“We warn against considering a hung-congress a done deal.  Trump is certainly not as unpopular, as you should think when you read the mainstream press coverage ahead of the midterms.  With a current rating of roughly 44-45%, Trump’s approval is at least on par with Obama’s approval rating heading into both the 2010 and 2014 mid-terms. The Democrats though fared poorly in both of the mid-terms under Obamas reign.”

“Based on a simple regression of the approval rating of the sitting president versus losses/gains of house seats in mid-terms since 94,  you should expect the Republicans to lose between 30 and 40 seats in the House, given Trumps current approval rating. A result that would be just enough to create a relatively slim Democrat majority (currently Republicans hold a 23 seat majority).”

“A result in line with Obama’s in 2014, when he was less popular (measured by the approval rating) than Trump is now, would lead the Republicans to keep the majority by a notch.  A hung congress is not a done deal. At least it could turn into a tighter race, than what is currently the widespread opinion.”