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The first presidential debate is set to shake up the elections campaign. Markets will move on implications for a new fiscal relief package, Yohay Elam, an analyst at FXStreet, explains.


A decisive Democratic victory to hit the USD – Nordea

Views on China aligned whoever is next president – ANZ

Key quotes

“If Biden is perceived as the winner, Republicans could conclude that they must do everything to impact the Supreme Court as they would lose their chance after the election. That would further lower the chances of further relief. In this scenario, markets would retreat, drag gold down with them, and the only winner would be the safe-haven dollar.”

“If Trump wins the televised encounter and improves his chances of re-election, there is a greater probability that Senate Majority Leader Mitch McConnell and his colleagues would devote more time to boosting the economy and their chances of holding onto the upper chamber. In this case, the greenback could fall while stocks and gold would shine.”

“Apart from the next stimulus bill, markets prefer certainty. Trump’s recent refusal to commit to a peaceful transition of power means that a close election could trigger a constitutional crisis and perhaps violence on the streets – an unfavorable outcome for investors. Representative Alexandra Ocasio Cortez, and Senators Bernie Sanders and Elisabeth Warren scare Wall Street. A Biden win in the debate raises the chances for a clean sweep by Democrats, allowing left-leaning lawmakers to push their agenda, a scenario markets dread. However, an inconclusive election is worse than AOC yielding more influence, even for markets.”