Welcome to the first business day of November, and as DB's Jim Reid writes in his Morning Reid note, the week ahead is a big one in the US and with it for global markets, with tomorrow’s midterm elections and Friday’s October jobs report the obvious highlights, alongside the ISM surveys and Wednesday’s Treasury quarterly refunding announcement. Elsewhere, central-bank decisions are due in Australia tomorrow, Sweden on Wednesday, and the UK and Norway on Thursday, while China’s private PMIs, German activity data and Japanese wages will also be in focus. Earnings remain busy too, with Apple and Palantir today, AMD tomorrow, and ARM and a broader slate later in the week.
Looking at more depth at the week ahead, tomorrow’s midterms will determine control of Congress for the final two years of President Trump’s term. Polling suggests Democrats are favored to gain the three seats needed for a House majority, while the Senate remains a much closer contest and the outcome in either chamber could take several days to become clear if the margins are tight. Polymarket currently put the probability of the Democrats taking the Senate at 74.0%. Well renowned pollster Nate Silver currently suggests a 75% probability.
From a near-term fiscal perspective, the lame-duck session after the election could prove at least as consequential as the composition of the new Congress according to DB economists, with government funding expiring on December 11 and Republicans likely to seek a reconciliation bill that could include additional defence spending and potentially address the debt limit. Markets will also look to see what happens to the Iranian conflict in the days after midterms. The concern is
