2 to 8 November: America has decided

Although there are a number of states yet to be called, Joe Biden has already gained over 270 electoral college votes to become the United States’ 46th President (to be inaugurated on the 20th January 2021). Although President Trump has not conceded yet and vowed more legal claims, it is highly unlikely that the incumbent President can remain in office. It is worth noting that a ‘blue wave’ victory by the Democratic Party did not materialise, as the Senate will most likely remain under the Republicans’ control at least until January, and there is a good chance that Republicans will retain a Senate majority thereafter. Financial markets found comfort in the idea that there would be no political deadlock over the outcome of the Presidential election, which could have created policy paralysis and policy uncertainty for a prolonged period.

Due to the excitements that came with the Presidential election, many have ignored the release of the latest labour market metrics in US: non-farm payrolls rose 638,000, whilst the unemployment rate fell to 6.9% in October. Fed Chair Jerome Powell noted the improvement in economic activity and the jobs market in his regular post-decision speech, but emphasised downside risks, which could halt the recovery. The Fed continues to be committed to the zero-lower bound for several years.

Now that the US Presidential election is behind us, investors can recalibrate their focus and pay more attention to policy agendas, vaccine news and the upcoming macro data releases.


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