US: Political risk coming into the mix – AmpGFX

Greg Gibbs, Director at Amplifying Global FX Capital, suggests that in the mix is the US election with potential for much uncertainty if Trump continues to narrow the gap in the polls to Clinton. 

Key Quotes

“His policies appear to throw into upheaval geopolitical stability, and propose what appears to be a significant fiscal stimulus and closing US borders to trade as well as Mexicans and some other countries.  Whether he would have much success in achieving these policy goals remains to be seen, but the market would price in at least some chance that he does, and this might immediately upset asset prices in the US, including potentially raising US yields, strengthening the USD and weakening the stock market.

There may be a sense of relief if Clinton is voted into power, pointing to more continuity with the status quo.  However, overall the political landscape will have changed, especially if it is a close outcome.  In which case, there will be agitation to pursue some of the agenda championed by Trump.  In any case, Clinton has shifted somewhat towards less openness to trade and more fiscal spending.”