• Contact Us
  • Homepages
Most Forex
  • For Beginners
  • Strategies
  • Technical Analysis
  • Product Reviews
  • News
  • Videos
No Result
View All Result
  • For Beginners
  • Strategies
  • Technical Analysis
  • Product Reviews
  • News
  • Videos
No Result
View All Result
Most Forex
No Result
View All Result
Home Forex News

How Will Markets React to the 2020 Election?

Forex Tips by Forex Tips
October 22, 2020
in Forex News
0
S&P 500 Index Dictated By Coronavirus Relief Bill Talks, FOMC Rate Decision
189
SHARES
1.5k
VIEWS
Share on FacebookShare on Twitter


US Elections Coverage Landing Page

  • U.S. elections are coming down to the wire, with less than three weeks to go until November 3.
  • A mixed composition of Congress could be the worst outcome for financial markets, while full Democratic or Republican control of Washington, D.C. could prove positive, regardless of specific policy outcomes.
  • The coronavirus pandemic makes the 2020 election cycle and the reaction in financial markets unlike any other election cycle in American history.

U.S. election season has dawned upon global financial markets, and the U.S. presidential race is coming down to the wire. Amid a haphazard federal response to the coronavirus pandemic that has culminated in U.S. President Donald Trump himself contracting COVID-19, challenger Joe Biden finds himself up double digits in the latest polls conducted through October 13.

A second term of Trump or a first term of Biden could have significantly divergent outcomes for the U.S. economy and global financial markets. But it’s not just the presidential race that matter, it’s not just about Trump and Biden. The composition of the federal government in Washington, D.C. will be a significant determining factor in how different asset classes respond; a mixed Congress could result in years of gridlock, as seen during parts of the Bush, Obama and Trump administrations.

Trump Vs. Biden on Economies and Markets

A decade after The Great Recession, Americans are dealing with the worst economy since The Great Depression. Depending upon the outcome of the November presidential election, the US economy could take very different tracks. While there may be some agreement in terms of trade or infrastructure, Trump and Biden diverge on nearly every other economic policy facet – from taxes, to jobs, to the coronavirus pandemic recovery itself.

How to trade the impact of politics on markets?

The global economy is showing increasing weakness and fragility ahead of the U.S. elections. The latest round of PMI readings in early-October suggested that the recovery is subsiding in parts of the developed world, mainly Europe and North America. Eroding economic fortitude exposes markets to geopolitical risks, with political threats rising elsewhere in Asia and Latin America.

How elections impact the US dollar

The U.S. Dollar has demonstrated a fairly consistent path since 1980. But 2020 is proving anything but a typical U.S. election year, thanks in part to the coronavirus pandemic and the ensuing response by the Federal Reserve. U.S. Dollar positioning heading into the election is the focus as the near-term monetary policy path appears to be set.

How elections impact Gold Prices

The U.S. Presidential election has a historical tendency to influence financial markets as a change in leadership often brings a shift in fiscal policy. For the price of gold, there has been greater responsiveness to the macroeconomic landscape change since President Richard Nixon took steps to end the Bretton-Woods system starting in 1971. After hitting a fresh all time high above $2000/oz in August, gold prices have settled closer to $1900 in September and through the first half of October. The November election could provoke another volatile move.

Will Trade Wars Persist after the election?

US-led trade wars with China and the EU are likely to continue under Trump administration, which has struggled to make significant progress: the latest round of trade data showed that the U.S. trade deficit in September was over +40% larger than it was in January 2017 when Trump took office. Multi-layered geopolitical issues not pertaining to trade may spill into trade discussions. But a Biden administration may ease tensions with EU, despite having few articulated incentives to relieve pressure on China.

How elections impact the VIX volatility index

Data from the last ten U.S. Presidential elections reveals the Dow Jones Industrial Average typically climbs around an election. Still, it is difficult to attribute any equity strength to an election singlehandedly as an infinite number of themes are at play in the market at any given time. While the well-known equity volatility index (VIX) has been trading sideways for the past three months, the latest readings in mid-October show that implied volatility for equity markets is still double what it was in January 2020.

— Written and compiled by the DailyFX Research Team





Source link

Share76Tweet47

Related Posts

Dow Jones Eyes Support, Straits Times Faces Singapore General Election

Copper Trading Tips and Strategies

by Forex Tips
March 4, 2021
0

Copper Trading: Copper Trading Tips and StrategiesCopper is a highly tradeable commodity.Copper is priced in US Dollars; so the...

How to Trade After a News Release

by Forex Tips
March 3, 2021
0

Traders need to learn how to navigate volatile markets by implementing a solid trading plan and adopting sound risk...

BTC/USD, ETH/USD Bullish Reversal at Hand?

by Forex Tips
March 2, 2021
0

Bitcoin, Ethereum, Goldman Sachs, Citigroup, Cryptocurrencies – Talking Points:Citigroup and Goldman Sachs recent endorsement of the cryptocurrency market could...

Australian Dollar Unfazed by Chinese PMI as RBA Meeting Shifts Into View

by Forex Tips
March 1, 2021
0

Australian Dollar, Caixin PMI, RBA, Bond Yields, Yield Curve Control – Talking Points:The Australian Dollar briefly drifted lower on...

Outlook for EUR/USD Negative Longer Term

EUR/USD Outlook Improves as German Bund Yields Rise

by Forex Tips
February 28, 2021
0

Fundamental Euro Forecast: BullishThe European Central Bank’s Governing Council has clearly decided to stress to the markets that it’s...

Load More

Categories

  • Crypto Strategies
  • Currency
  • For Beginners
  • Forex News
  • Forex Trading Tips & Strategies
  • Investment
  • Technical Analysis
  • Videos
Forex Pulse Detector

Categories

  • Crypto Strategies
  • Currency
  • For Beginners
  • Forex News
  • Forex Trading Tips & Strategies
  • Investment
  • Technical Analysis
  • Videos

Newsletter

  • Home
  • Contact
  • Privacy Policy
  • Store

© 2018 Forex Blog

No Result
View All Result
  • Contact Us
  • Homepages

© 2018 Forex Blog.