Article / 26 September 2016 at 8:02 GMT

Markets wary as Trump pulls ahead into first debate

Head of Editorial Content / Saxo Bank
  • Markets cheer Fed stasis with risky asset rally
  • US presidential election 'a dead heat' going into first debate
  • Analysts rushing to gauge market impact of Trump victory

By Michael McKenna

Last week's Federal Open Market Committee decision to keep interest rates steady was cheered by risky assets as markets took the apparent endorsement of the easing-focused status quo as an opportunity to push equity indices towards new records.

The buillish price action was not confined to the US, reports Saxo Banque from Paris, as the French CAC 40 index also put in its strongest weekly performance since mid-July.

"After the central bank-derived euphoria," say strategists from Saxo's Parisian office, "investors will be concentrating on macroeconomic data releases as the US election head into the final sprint."

While the late-summer orthodoxy generally held that Democratic candidate Hillary Clinton would head into today's debate as the odds-on favourite, the recent surge in the polls by Republican contender Donald Trump means that it is essentially anyone's game at this point.

According to the latest polling from the Washington Post, the two candidates are in a "virtual dead heat" ahead of the crucial first debate; more worryingly for Clinton and defenders of the US status quo in general, the latest Los Angeles Times polling data show Trump with a 3.3% lead ahead of the 90-minute event at Hofstra University tonight (2100 EST).

"The recent shift in the polls gives even more weight to tonight's debate," said Saxo Banque in its morning briefing; "until now, the market impact of the election was non-existent, but following from tonight's debate we will see numerous analysts rushing to gauge the potential impact [of either a Trump or a Clinton victory] of the incoming polling data on markets."

Hillary Clinton
"Now just hold on a minute here..." Photo: iStock 

Michael McKenna is an editor at


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