Executive summary Executive summary • With nine weeks until Election Day and Hillary Clinton ahead of Donald Trump in most polls, markets are currently showing no signs of concern about the uncertainty related to this event. • But Clinton’s average lead in the polls has been reduced from around 8% points after the July conventions to 3% today. Considering the possible election of a protectionist president and that polls got Brexit wrong, markets seem too complacent in our view. A pick-up in market volatility around the election on 8 November still seems like a good bet. • The mere uncertainty over what would happen with Trump in the White House could be damaging to the US economy and global investor sentiment. • A Clinton win of the White House and continued divided government is our baseline and probably the best of the worst likely scenarios. • A Trump win and a Republican-controlled Congress could result in a weaker US economy, with the economic damage felt beyond the US, and a potentially sharp increase in financial market volatility, with sell-off in risky assets and perhaps also US Treasuries plus a weaker USD vs the EUR. 2
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