It’s Finally Election Time!
It’s week ahead video time, and the moment the market has been waiting for and bracing for has finally arrived as the US election takes place on November 3rd which is of course Tuesday. There are other big events like FOMC, BOE, RBA and NFP but all of these will play second fiddle to the election.

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Currently, polls still suggest Biden has a 87% probability of taking the wine (340 Electoral Votes) and similarly the polls suggest that the Democrats are expected to win both the House as well as the Senate (according to FiveThirtyEight).

So, if that's the case why did risk assets take a beating this past week? Well, apart from the rising virus numbers and lockdown restrictions, the dynamics and importance of this election means the possibility of more uncertainty and heightened volatility is very possible, depending of course on the outcome of the election.

Also remember that there are a few key points to keep in mind about the election:

• It’s not a popularity contest. The winner is decided by who gets the most electoral college votes, and the winning candidate needs a majority of 270.

• You’ve got mail (and lots of it). Coronavirus has changed the way millions of Americans vote, and tens of millions of mail-in-ballots could delay election results.

• Being president isn’t everything. For markets the focus is arguably on whether there is a split government or not, instead of who takes the win.

• Polls often disappoint. Flash back to 2016, polls showed Clinton taking the win…a lot can change in terms of actual results.

How to navigate this event and how markets would likely respond is all discussed in our week ahead video for this week.

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Highlights of the video:

00:30 – Current Baseline
03:50 – Baseline expectations for the upcoming risk event
07:59 – Sentiment Shifts & Trade Plan

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