Daily update
Daily update
- At the time of recording, the US Senate has been called for the Republican party, and the House and presidency remain open. Financial markets have moved to price a victory by former US President Trump. However, markets appear to assume that the campaign rhetoric (specifically around deportations and tariffs) will not fully translate into policy.
- The second most pressing concern of voters, according to exit polls, was the economy. This does not refer to abstract concepts like GDP, but to perceptions of economic wellbeing. Evidence before the election suggested that inflation perceptions were a significant economic concern. Inflation perception is a complex topic—entire books have been written on it—and investors may need to focus on the heightened political sensitivity of the subject.
- Away from politics, there are a host of composite business sentiment polls out from Europe. These are not going to influence investors, as they reflect past sentiment (itself a distorted barometer).
- There are several ECB speakers scheduled, including ECB President Lagarde (the Federal Reserve is in its blackout period ahead of tomorrow’s policy decision). It is worth remembering that if the EU puts in place retaliatory trade taxes, this will act as a tax on EU consumers and impact inflation (though EU tariffs would be selective).
