U.S. presidential race update - Nomura

Analysts at Nomura offered an election update for the U.S.

Key Quotes:

"At the conclusion of the first presidential debate, the initial reaction from financial and prediction markets suggests it was a modest win for Clinton. The latest polls seem to confirm this.

According to FiveThirtyEight‘s Polls-Only model as of 30 September, the gap between Clinton and Trump has widened notably (Clinton: 66.7%, Trump: 33.3%) since the first presidential debate on 27 September, when the race was still very close. Although polling data show Clinton has widened her lead, the race to the White House remains fluid and there is still plenty of time for the race to turn. With 39 days left until Election Day (9 November) and two more debates on the calendar (Sunday, 9 October, and Wednesday, 19 October), we think the race is far from settled. In the congressional races, it seems that the House is likely to remain in Republican control, largely because there are not enough “competitive” seats. In the Senate, it looks likely that the Democrats will gain seats, but whether they will gain enough to obtain a majority remains an open question.

For this reason, we think that, if Clinton wins the election, fiscal policy would remain close to status quo, as the conservative House will likely block her plans. However, under Trump’s presidency, some degree of compromises on his tax and spending proposals would likely be forced, as the Democrats’ sizable minority in the Senate could negotiate for a different and more muted fiscal package."