The market isn’t pricing in the possibility of a Donald Trump presidency at all, according to Kathleen Brooks, head of research at City Index.
Brooks, in an interview with Proactive Investors, looks at what she characterises as an unlikely but possible event that is being overlooked by the market.
Trump wining the US election would trigger a ‘risk off’ event in the market, she says.
A seemingly more likely Hillary Clinton win would be ‘neutral’ for the market generally, according to Brooks, though she notes that the Democratic nominee would be expected to have an aggressive start to her term – and that could be bad news for drug and oil companies.
Closer to home, Brooks also talks Sterling, highlighting the big risks for the pound, including the slightly later than billed exit of Mark Carney from the Bank of England, as well as the upcoming Brexit negotiations.
“The FX market has greeted it [Carney’s extension] with mild enthusiasm, but we’ve got to remember he’s only extended his
Story by ProactiveInvestors