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1 Feb 2016
US elections kicking off and quite unusual - Nomura
FXStreet (Guatemala) - Analysts at Nomura noted that today, the first real voting in this year’s presidential race will occur at the Iowa caucuses.
Key Quotes:
"This has been a very unusual campaign so far. Six months ago we suspect that few would have predicted that on the eve of the Iowa caucuses Donald Trump would have a 15 point lead over all the other Republican candidates for President in national polls and with more conventional candidates such as Jeb Bush, John Kasich and Chris Christie having less than 5%. Similarly, few would have predicted that Bernie Sanders would have a chance to win both of the first two contests in the Democratic primary."
"What this means is that the outcome of the national election is likely to be more uncertain. We have argued in the past that the Democrats have an advantage for the White House, but the Republicans have a strong position in the House.1 Taken at face value, that implies a high likelihood of a continuation of a divided government."
"But the surprising success of Donald Trump and Bernie Saunders may suggest there is a greater possibility of outcomes other than a continuation of the status quo. The possibility of both the White House and Congress being controlled by the same party may be higher than it has in the past. But the campaign may have already changed the assumptions about some key policy issues. For example, opposition to reducing barriers to trade has been popular in both parties. It is particularly notable on the Republican side. This may have already undermined the Trans Pacific Partnership trade deal. It is still very early in the campaign, but how the debate on economic issues evolves in this unusual election year is worth watching."
Key Quotes:
"This has been a very unusual campaign so far. Six months ago we suspect that few would have predicted that on the eve of the Iowa caucuses Donald Trump would have a 15 point lead over all the other Republican candidates for President in national polls and with more conventional candidates such as Jeb Bush, John Kasich and Chris Christie having less than 5%. Similarly, few would have predicted that Bernie Sanders would have a chance to win both of the first two contests in the Democratic primary."
"What this means is that the outcome of the national election is likely to be more uncertain. We have argued in the past that the Democrats have an advantage for the White House, but the Republicans have a strong position in the House.1 Taken at face value, that implies a high likelihood of a continuation of a divided government."
"But the surprising success of Donald Trump and Bernie Saunders may suggest there is a greater possibility of outcomes other than a continuation of the status quo. The possibility of both the White House and Congress being controlled by the same party may be higher than it has in the past. But the campaign may have already changed the assumptions about some key policy issues. For example, opposition to reducing barriers to trade has been popular in both parties. It is particularly notable on the Republican side. This may have already undermined the Trans Pacific Partnership trade deal. It is still very early in the campaign, but how the debate on economic issues evolves in this unusual election year is worth watching."