Biden still out front – US election update

Welcome to our latest US political update with 56 days until the presidential election.

Each week we will take a look at the likes of policy changes, polling shifts, the continued impact of Covid-19, the geopolitical stances that the candidates are taking and of course, the economic impact on the US, the dollar and global trade. The US presidential election remains the most important political event globally and markets are starting to pay attention to the run-in to November’s polling day.

Suckers and losers

Politicians want elections to be decided by voters excited by policies, who share a vision for a country that that candidate alone can deliver; a mandate for change. Typically however, mistakes and gaffes can prove decisive; think back to Nixon’s refusal of make-up in the first-ever televised Presidential debate against JFK, Gordon Brown’s ‘bigoted women’ comments or Hillary Clinton characterising that half of Donald Trump’s support was made up by a “basket of deplorables”.

A storm is brewing in the US over remarks that the President reportedly made in 2018 on a trip to France to commemorate the centennial of the end of the First World War. According to four people with knowledge of the President’s comments he asked aides “Why should I go to that cemetery? It’s filled with losers.” In a separate conversation on the same trip, Trump referred to the more than 1,800 marines who lost their lives at Belleau Wood as “suckers” for getting killed.

The US’s relationship with its military is one of veneration and pride but Trump has shown little but contempt for the men and women who join the Armed Services since his political career began back in 2015.

Similar outbursts have not hurt him in the past and so it may be wishful thinking that these reports will. Republicans cannot win without the military vote however and hence the administration’s vehemence with which it is fighting these reports. If there is a swing in the polls it should come in the next few weeks.

Jobs news helping

Friday’s jobs report in the US was ostensibly a positive one with employment rising alongside measures of labour force participation as those workers who had been furloughed re-joined the workforce.

This month’s numbers however are swelled by a once-in-a-decade event which sees workers brought on to help the US census bureau obtain a complete look at the populace of the US. This increase will flatter jobs numbers this month and have the opposite effect next month as the census comes to an end and so we can expect nearly 220,000 people to lose their jobs in the coming reading.

Elsewhere within the report it is becoming clear that two widely expected consequences of the pandemic are coming true in the labour statistics, notably that those who have permanently lost their jobs are struggling to find a new job and that unemployment is being felt by ethnic minorities more than their white counterparts.

Expect both Trump and Biden to make political hay out of the jobs numbers in the coming weeks.

Polling update

Polls in Arizona and Wisconsin have both started to swing in favour of Democratic candidate Joe Biden in the past week. The shooting of Jacob Blake in Kenosha, Wisconsin has seen a shift away from Trump’s law and order messaging in the state whilst Arizona seems to have reacted negatively to the Republican convention.

The major improvement for President Trump in the past week has been a narrowing of his deficit to Joe Biden in the crucial state of Pennsylvania. According to an average of polls however, the President remains 3 percentage points behind Biden.

Nationally, the average poll has Biden 6% over President Trump.

Have a great week.

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Jeremy Thomson-Cook

Jeremy Thomson-Cook

Jeremy has over 13 years experience working in the FX industry. As a specialist in political risk mitigation and currency hedging, he regularly advises clients on the day-to-day moves of the markets and the implications of fiscal and monetary policy on international businesses.