I CFD sono strumenti complessi e comportano un alto rischio di perdere denaro rapidamente a causa della leva finanziaria. Il 74.6% dei conti degli investitori al dettaglio perdono denaro quando scambiano CFD con questo fornitore. Dovresti considerare se hai capito come funzionano i CFD e se puoi permetterti di correre l'alto rischio di perdere il tuo denaro.


Volatility alert: US election fast approaching

Sean MacLean
Research Strategist
16 lug 2020
The US election is four months away and although markets aren’t trading into the event too heavily yet, election volatility is just around the corner.

Markets are focussed on the pandemic, lockdown, and economics as cities reopen for business. But both the Democrat and Republican National Conventions are scheduled for August, and from here we’ll see markets actively thinking about election probabilities and pricing in any relevant risk.

At the start of this year, markets were fairly confident the US would elect Trump for a second term - but a lot has changed since. Trump’s approval rating has fallen to 38% - a level where incumbents have historically struggled to bounce back from. Whereas betting markets have the odds of a Biden administration from 2021 north of 60%. It’s a huge turnaround since the start of the year, but with four months to go a lot could change yet.

Trump vs Biden election victory odds, according to PredictIt. Source: Bloomberg

The outcome of the election could bring a significant amount of change but markets are focussing mostly on two major themes here: 1) China and 2) Taxes.

Traders and investors know what to expect from Trump on China policy. Biden, once seen as a softer stance on China, has certainly evolved to a much harder stance over time. Sure Biden would be less likely to slap China with additional tariffs as punishment, but the US-China will remain fragile. On China policy, both candidates are a bearish case for markets, as the trade war stunted global trade and growth.

Taxes are the big uncertainty here. Trump slashed the corporate tax rate to 21% from 35%, a pro-business move designed to encourage more investment in the US economy. Critics note that benefits mostly flowed to wealthy shareholders rather than benefiting the wider US economy. Biden’s ready to reverse the tax cuts - not all the back to 35% but to a middle of the road 28%.

Often overlooked in the tax debate here though is the fact that the corporate tax cuts were mostly deficit financed, which is fiscally expansive. Although a Biden administration will introduce tax hikes, a proposed $2tn stimulus will be mostly deficit financed - still fiscally expansive - and the infrastructure spend might better distribute gains more widely, which is a good case for long-term economic health.

As the election starts to become a consideration for traders, we can see USDJPY 6-month volatility trading at a premium to short-term volatility. Although USDJPY hasn’t been behaving like a safe haven recently, it does have an historical record as the favourite vehicle to hedge election risk. A little closer to the time, perhaps after the party conventions in late August, we could start to see considerable flow into the JPY - especially if markets start to feel nervous about change under a possible Biden administration.

With four months to go, it’s time to think about the US election and if you’re ready for election volatility. A very important one for the trading radar. 

DateKey election event
17 - 20 AugustDemocratic National Convention
24 - 27 AugustRepublican National Convention
29 September1st Presidential debate
07 OctoberVice presidential debate
15 October2nd Presidential debate
22 October3rd Presidential debate
3 NovemberElection day

Iniziamo a fare trading?

Iniziare è facile e veloce. Con la nostra semplice procedura di apertura conto, bastano pochi minuti.

Pepperstone non dichiara che il materiale qui fornito sia accurato, attuale o completo e quindi esso non dovrebbe essere considerato come tale. Le informazioni qui fornite, da parte di terzi o meno, non devono essere considerate come una raccomandazione, un'offerta di acquisto o vendita, la sollecitazione di un'offerta di acquisto o vendita di qualsiasi titolo, prodotto o strumento finanziario o la raccomandazione di partecipare a una particolare strategia di trading. Consigliamo a tutti i lettori di questi contenuti di informarsi in maniera indipendente. Senza l'approvazione di Pepperstone, la riproduzione o la ridistribuzione di queste informazioni non è consentita.