The US President Elections is going down the wire in a protracted process. Republicans seem to be in pole position to win the Senate while if re-elected, Trump could squeeze a larger stimulus deal out of Congress, FXStreet’s Analyst Yohay Elam reports.
More:
- US Elections: Three reasons to expect delays for some election results – Charles Schwab
- US Elections: Georgia, Wisconsin, Michigan and Pennsylvania to be decisive – Danske Bank
- 2020 Elections: Uncertainty to weigh on markets and send flows to the US dollar – TDS
Key quotes
“President Donald Trump outperformed the polls with a quick win in his new home state of Florida. He also secured Ohio, Texas, and Iowa. However, Democratic rival Joe Biden won Arizona, re-expanding his path to win the elections. The president will likely win North Carolina and probably Georgia, but the election hinges on slow-counting Midwestern states – Pennsylvania, Michigan, and Wisconsin.”
“The president poured cold water on markets by declaring ‘Frankly, I think we won’ and claiming fraud. However, investors are focused on one thing – fiscal stimulus. A ‘blue wave’ in which Dems win the White House and the Senate would secure a generous relief deal. While Biden has a good shot at becoming the 46th President, Dems have diminishing chances of winning the Senate.”
“Republicans have won all the safe seats in the upper chamber, including those in Iowa, Montana, and South Carolina which seemed possible. If Republicans indeed hold onto the upper house, they could make Biden’s life miserable. A Republican Senate would likely allow for a sub $1 trillion stimulus package. However, if Trump prevails, he would feel reinvigorated and could claim a mandate to force a generous package on his fellow Republicans – perhaps to the tune of $2 trillion.”
“For markets, the second-best thing to a blue wave is a Trump win. That would be more favorable for stimulus than Biden at the White House without a unified government.”
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