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Analysts at Nomura explained, that at this point, they think the prospects for the midterm elections are not that different from where they were in early September.

Key Quotes:

“We think Democrats have about a three in four likelihood of taking control of the House and the Republicans have about a four in five likelihood of retaining control of the Senate. This central scenario is not positive for US economic policy. A House led by Democrats is unlikely to cooperate with either the Trump Administration or a Republican controlled Senate on much beyond keeping the government open. One exception may be passage of the revised NAFTA agreement (a.k.a. the “USMCA”), which we think the new Congress will ratify. We suspect that, if the House is controlled by Democrats, it will spend a lot of time investigating the Trump Administration. Such investigations will not improve the prospects for economic policy initiatives over the next two years.”

“While our base case has not changed much in recent months, the controversy over Judge Kavanaugh’s nomination to the Supreme Court has been a major shock to the US political system. It has highlighted, and perhaps intensified, sharp and longstanding partisan divisions. So far, the evidence suggests that this controversy may have improved somewhat Republican prospects in the upcoming election, but the election is still four weeks away and the final resolution of the Kavanaugh case became clear only a few days ago.”