Markets before the US elections – businesses live | Business

Hello and welcome to our slippery coverage of the global economy, financial markets, the euro zone and businesses.

Election fever reigns on the markets as Americans prepare to go to the polls for the mid-term elections.

As usual, the mid-term elections are in part a referendum on the White House's performance, reinforcing or possibly relaxing the president's control over the levers of power.

Investors around the world are nervously watching to see if Democrats can take control of the lower house of representatives. Polls suggest they have good chances. Republicans, however, Probably maintain their hold on the Senate.

A good night for the Democrats could allow them to prevent Trump from imposing further tax cuts and other fiscal stimulus. They could also try to limit its ability to launch destabilizing trade wars with other nations (although the president has many unilateral powers here too).

This could weaken the dollr (because it eliminates some pressure to raise interest rates), easing the currencies of emerging markets.

A Democrat-controlled House could (and surely would) also launch new investigations into the president's conduct, projecting the shadow of the White House's removal. This could send shares sliding on Wall Street.

But if the Republican vote holds up, Trump will be revitalized to continue promoting his America First strategy – creating more volatility in the markets, and possibly intensify the trade dispute with China.

Thus, currencies, stocks and bonds from around the world will be affected by the position of millions of Americans today.

Tom Fitzgerald, co-manager of the Amity International Fund at EdenTree Investment Management Explain:

So far, Republican control of legislative powers – the House of Representatives and the Senate – has allowed President Donald Trump's big tax package and his deregulation program to come true, while protecting it from various ongoing investigations. A Republican-friendly election result, by keeping both the House and the Senate, could put the economy and global markets on a very different path at a time when Europe and China are showing signs of weakness. In such a scenario, President Trump would have broader policy options, especially on the fiscal front and the ability to continue his deregulation agenda. The market could perceive this scenario as the most favorable for growth, as it would increase the chances of larger tax cuts and additional expenses.

On the other hand, in a scenario of favorable election results for Democrats, who would give them control of the House and the Senate, President Trump would have very limited political options for the rest of the legislature. To the extent that further fiscal easing may not be possible, President Trump could focus his efforts on the trade war against China or implement commercial threats against the EU. Europe would therefore be negatively affected by such shocks, given the considerable impact of customs duties on cars in Germany and Europe.

Also coming today

New surveys of purchasing managers in euro area service sector companies are published. They should confirm that growth slowed in October, which corresponds to the slowdown in UK service companies announced yesterday.

But there is better news from Germany this morning; Factory orders rose 0.3% in September, more than expected.

L & # 39; s calendar

• 9am GMT: PMI of the euro area services sector for October
• 10h GMT: Producer price index in the euro area for September