Elections
Your feedback is important to us. Please take our client survey today. Highlights A surge in the number of Covid cases worldwide and the failure of the US Congress to forge a stimulus deal has cast doubt on the “reflation trade.” European governments…
Your feedback is important to us. Please take our client survey today. Highlights US Election & Duration: We estimate that there is an 80% probability of a US election result that will give a lift to US Treasury yields via increased fiscal stimulus.…
Highlights Global Duration: US Treasury yields have started to creep higher and the move is likely to continue in the coming months regardless of who wins the White House. Reduce overall global duration exposure to below-benchmark, focused on the US.…
Highlights We are upgrading Trump’s odds of winning to 45%. We have bet on a Democratic sweep all year. Incumbent parties rarely survive recessions, and President Trump has mishandled the pandemic. However, our updated quantitative election model –…
Highlights The US saves too much to achieve full employment but not enough to close the current account deficit. According to the “Swan diagram,” a weaker dollar would move the US economy closer to “external” and “internal” balance. Structural forces…
Highlights The US Senate election is as important as the presidency for US politics and markets. Our quantitative Senate election model suggests Democrats will win control – as we have long argued – but there is a 49% chance that they do not, which is…
Highlights Duration: Prospects for more pre-election fiscal stimulus are slim. But with the Democrats gaining ground in the polls, the bond market will stay focused on rising odds of a blue sweep election and greater fiscal stimulus in early 2021.…
Highlights Both public opinion polls and betting markets suggest that Joe Biden will become President, with the Democrats gaining control of the Senate and retaining the House of Representatives. Such a “blue wave” would have mixed effects on the value of…
Highlights President Trump is waffling on fiscal relief. Our constraints-based framework still points to a deal, but the odds have clearly fallen. US and global stocks have rallied despite the fiscal failure. Markets evidently believe stimulus is coming…
Highlights Three tail risks will continue to dominate the FX market narrative in the coming weeks: The upcoming November elections, Brexit, and the new wave of COVID-19 infections. As such, markets remain vulnerable in the near term and the dollar will…