US: MNI POLITICAL RISK - US Elections Weekly: Models Favour Harris
Sep-27 17:30
- Vice President Kamala Harris unveiled a fully fleshed out policy platform for the first time. Harris’ camp will hope that the platform launch can address voter concerns that Harris has fewer economic solutions than former President Donald Trump.
- Trump's Electoral College advantage, a deeply ingrained conventional wisdom of the Trump era, may be shrinking as Harris shows surprising strength in the Rust Belt relative to the national vote.
- Senate Majority Leader Chuck Schumer (D-NY) is looking at several alternate routes to retaining the Senate without Senator Jon Tester (D-MT) winning his tough race in Montana.
- The Democratic Senatorial Campaign Committee announced a “multi-million dollar” investment on TV ads in Florida and Texas – two large states that require significant investments to reach voters but are showing signs of being competitive this cycle.
- Republicans are leading Democrats on a range of metrics that have historically been “highly predictive” of presidential election outcomes.
- Harris has slightly improved on her national polling advantage and ticked up in the three key northern swing states.
- Nate Silver’s forecast model is slightly more bullish on Harris this week, rising to a 58% implied probability of a Harris win.
- Inside: A full round-up of polls, prediction market data, and notable news from the week.
Full article: US Elections Weekly
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FOREX: EURUSD Slides Back Towards 1.11 Amid Broad Greenback Recovery
Aug-28 17:29
- The US dollar has stabilised on Wednesday and the USD index stands 0.56% higher on the session, putting a pause on the steep weakening trend across August. With bunds outperforming global peers ahead of the latest round of Eurozone inflation data tomorrow, EURUSD has weakened 0.65%, steadily edging towards the 1.1100 handle as we approach the APAC crossover.
- Eurozone money and lending data pointed to a continuation of soft credit dynamics, and this has likely weighed on the single currency at the margin.
- The move lower for EURUSD is considered corrective given last week’s appreciation reinforcing a bullish technical set-up. Moving average studies are in a bull-mode position too, highlighting a rising trend. The trend is overbought, a pullback would allow this condition to unwind. Key short-term support to watch is 1.1036, the 20-day EMA.
- Single currency weakness was also notable against the Swiss Franc, which relatively outperforms on the session. EURCHF is set to increase its losing streak to three sessions, extending the pull lower from the August highs to over 200 pips.
- Vols are further biased against the greenback, with EUR, GBP and JPY 1m risk reversals posting a Z-score north of 2 points in favour of USD puts. This is more extreme in the USD/CHF curve, in which 1m risk reversals cleared 1.5 points in favour of puts today for the first time since the onset of COVID in March 2020. This makes the USD weakness this month distinct from the USD-selling phase into end-Dec'23.
- Eurozone inflation data kicks off on Thursday with releases for Germany and Spain in focus. Revisions to US GDP and PCE for Q2 highlight the US data calendar.
US: CNN Interview Entails Risk For Harris
Aug-28 17:26
Vice President Kamala Harris, and her running mate Governor Tim Walz (D-MN), will appear on CNN at 21:00 ET on Thursday for the first unscripted media event of Harris' presidential election campaign.
- The interview will be the first opportunity for voters to see if Harris has resolved some of the communication issues that sank her 2020 primary campaign. During the 2020 campaign, Harris was criticised for an unfocused approach to policy and a failure to authoritatively balance the progressive and moderate wings of the party.
- The New York Times notes that Harris "all but went into a bunker for about a year, avoiding many interviews out of what aides said was a fear of making mistakes and disappointing [President] Biden," following an interview with NBC News in 2021 when she declared after being asked why she hasn’t visited the US-Mexico border, “I haven't been to Europe."
- Harris’ carefully choreographed election campaign has contributed to a surge in polling but has drawn sharp criticism from the Washington press pack. Although the interview entails risk, it is unlikely that Harris’ press-shy approach is sustainable in the long-term.
- A poll by Echelon Insights, found 89% of all adults agreed that it was “important for candidates to take questions.”
FED: RRP Usage Lifts Away From Recent Lows
Aug-28 17:24
- RRP usage increased $45bn to $389bn today, drifting higher ahead of month-end for technically the highest since Jul 24 as it pulls away from a period closer to a little above $300bn.
- The number of counterparties increased by 6 to 74, its highest since Aug 20 and before that Jul 24 as well.
