Last night saw the US presidential election TV debate between Donald Trump and Kamala Harris in what was considered an extremely important milestone ahead of the election.
In response to the debate, Charu Chanana, Head of FX Strategy and Global Market Strategist at Saxo, has shared analysis on how she believes this may impact markets, public perception and ultimately, the election result.
She said: “The US Presidential debate achieved its goal by providing a decisive edge to one of the candidates in what has been an exceptionally close race. The stark contrast to the previous debate in June, which led to Biden’s withdrawal and Harris’s endorsement as the new Democratic nominee, was evident. Harris demonstrated a clear advantage over Trump, with her odds of winning increasing on PredictIt to 56%, up from 53% before the debate. Her strong performance, particularly on tariffs and race issues, highlighted the effectiveness of her arguments and critiques.
“The debate also spurred a surge in donations to the Democrats, further energized by Taylor Swift’s endorsement, which could boost support from women and younger voters. Trump’s potential reluctance to accept another debate that has been offered by the Democratic campaign might make him appear evasive, further shifting the momentum in Harris’s favour.
“Harris’ rising prominence could have notable effects across various sectors. Crypto and energy stocks might face headwinds as market sentiment adjusts to the shifting political dynamics. Many of the other ‘Trump Trades’ such as a weaker Chinese yuan or traction in defence stocks could take a backseat as Harris gains momentum. While a ‘Harris Trade’ is still challenging to price in, given the complexities of the Senate limiting the prospects of a Democratic clean sweep, a split Congress could mean restrained fiscal spending, keeping the risk of a recession alive for 2025”
