US: Chaos in Cleveland? – Westpac
Sean Callow, Research Analyst at Westpac, suggests that the markets also
need to contend with summer political event risk from the US
presidential campaign.
Key Quotes
“This
week’s easy victory for Ted Cruz in the Wisconsin primary has seen
oddsmakers trim the chances of Donald Trump winning the nomination.
While he remains the favourite, the prospect is growing of the winner
being decided at the Republican National Convention, set for July 18–21,
2016.
A contested convention has not occurred since 1976. While
the most likely scenario for election day in November remains Hillary
Clinton against either Trump or Cruz, the internal resistance to both
Republican frontrunners leaves open the possibility of another, arguably
more centrist candidate.
Since the Wisconsin vote, such talk has
picked up. Anything seems possible in this year’s wild campaign so we
can’t dismiss the chance (though low) of neither Trump nor Cruz
representing the Republicans. A centrist choice such as Kasich or even
House Speaker Paul Ryan could well spark a burst of optimism in US
markets. If Ms Yellen’s current fears are justifi ed, markets will be in
need of some good news by July.”
(Market News Provided by FXstreet)
