The VP debate is consequential amid COVID-19 and the presidential candidates’ old age. While Harris may win on health, prosecuting the calm VP on the economy and race relations will likely end with a win for Pence, narrowing Biden’s large lead against Trump and adding to uncertainty which markets dislike, FXStreet’s analyst Yohay Elam reports.
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“Harris will likely criticize Trump’s administration’s mishandling of coronavirus. Pence heads the task force for the disease, making it easier to tie him to his boss. Democrats enjoyed a ‘blue wave’ – or sweeping victory – in the 2018 mid-term House elections by focusing on healthcare – and Harris has an even stronger case as millions are losing their insurance alongside their jobs. Unless Pence surprises with a GOP plan, he would likely lose the topic on both the mounting death toll from COVID-19 and a lack of any health care program.”
“Pence may be able to distance himself from his boss and paint a rosier picture of a recovering economy, especially given the public perception and signs of recovery.”
“Pence is a calm debater and has not been caught making demeaning remarks. By just being nice to a woman of mixed race – he would already be far better than Trump. In turn, that would earn him points with Republicans who are reluctant to vote for the inflammatory president. The doubts that some right-wing members have raised over Harris’ eligibility to run – echoing the racist Birtherism movement Trump championed against Obama – will likely be unequivocally disavowed by Pence. The bar is low the VP against his challenger on that field.”
“Investors tend to prefer Republican presidents – not on economic stewardship, but on business-friendliness such as tax cuts. However, with the country and the world still reeling from the virus, markets want a clear result and more stimulus. Recent surveys raised the chances of a landslide Democratic sweep – full control of all levers of power that would allow for spending. If Pence succeeds in narrowing the gap, investors could wind down such expectations. A retreat in stocks would be accompanied by an increase in the US dollar.”
“In the unlikely scenario that Harris overwhelms Pence – or that the debate is canceled altogether – equities would have room to rise and the dollar could fall.”
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