With less than three weeks to go before Election Day on 8 November, the third and last TV debate between Hillary Clinton and Donald Trump was held in the early hours of Thursday. The debate was probably the best between the two candidates with the focus mostly on politics. A CNN/ORC poll found that Hillary won the debate (52% versus Trump's 39%). The markets also think it was a good night for Hillary's winning chances as prediction markets moved towards Clinton.
Neither polls nor model projections have changed significantly since our last monitor and it still seems most likely that Clinton becomes the next US President. Looking at national polls, Clinton is still significantly ahead (48.5% versus 42.1% for Trump), see chart 2. According to model calculations from FiveThirtyEight, the likelihood of Clinton winning the election continues to be above 85%, see chart 3. That said, with Brexit fresh in mind, we think one should be cautious in interpreting the outcome based on polls.
When looking at electoral votes, Clinton still has a solid lead with 260 electoral votes against Trump's now 170 votes (up from 165) , see chart 1. This leaves Clinton very close to the 270 votes needed to win. Since there are only 108 electoral votes left in close race states and given that Clinton is ahead in most of them (including the important Florida), it is difficult to see how Trump could get above 270 votes at the moment. There are, however, still three weeks left and unforeseeable events could alter the picture.
The election is not just about who will become the next President of the US, as the Congressional elections will take place at the same time. While it is likely that Republicans will continue to have majority in the House of Representatives, the race is more close when it comes to the Senate. Of the 34 seats (out of 100) in the Senate up for election, Republicans hold 24. Current projections show a very close race with 47 seats to the Democrats and 46 to the Republicans. This still leaves seven seats on the battlefield (of which six are currently Republican). This highlights that the risk of a divided congress is high.
For possible economic and financial implications of the election, see our presentation Trump versus Clinton - the economic and financial implications of the 2016 US election, 7 October 2016.
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