Final stretch

Editorial The US presidential elections are approaching with their share of uncertainties about the winner (possibly Joe Biden with an 8 percentage point lead on Donald Trump in the RealClearPolitics polls), the measures that will be taken, particularly in terms of corporate tax increases, and especially a possible challenge to the result by the loser (Donald Trump according to the polls). However, financial markets do not seem very concerned. Given the risks, volatility remains low on equities (VIX at 27%) and on forex (1-month implied volatility of EUR/USD at 7.6%). The markets actually remain focused (and well supported), especially on the US stimulus plan. For the time being, it is not certain that a bipartisan agreement will be reached before the 3 November elections, which could delay its implementation and thereby maintain volatility in the very short term.