Senior economist at AXA IM David Page has updated his view on the US election. Here are the key points.
- Following a marked worsening in polling in early August, Donald Trump has maintained a consistent pace of recovery to draw almost level with Hillary Clinton in current polling.
- Trump has campaigned in a more disciplined fashion in recent months and his message appears closer to traditional Republican values.
- At the same time Clinton has struggled recently, not least with health issues having been diagnosed with pneumonia.
- We await the reaction to Monday’s TV debate to see if Clinton’s performance was sufficient to arrest Trump’s momentum. Polls at present suggest the election is in the balance.
- Trump has also moderated his economic manifesto to be closer aligned with House Republican proposals. His policy is now a more corporate focused fiscal stimulus that we think would result in a sustainably faster pace of activity. But some of his other economic proposals could still inflict material damage to the economy.
- Our analysis provides tentative evidence that equity markets have reacted more nervously as the prospect of a Trump Presidency rises.
- Both US government yields and the dollar have shown clear evidence of rising with the prospect of a Trump victory.