The financial markets seem to be taking political risks in the United States and Europe more seriously. Recent events have highlighted the resurgence of populist threats in advanced economies, causing concern among global investors.
US President Joe Biden’s poor performance in the presidential debate against Donald Trump and the strong showing of Marine Le Pen’s far-right party in France’s parliamentary election have pushed political risk to the forefront of investors’ worries.
In prediction markets, Trump is now favored to win the election, with Biden’s chances dropping significantly. Investment banks are also assessing the potential impact of Trump’s policies on the economy and trade, causing further unease among investors.
The implications of these political developments, especially in the US and France, could have far-reaching consequences for the global economy and markets. It is crucial for investors to closely monitor these risks and adjust their strategies accordingly.
Nicholas Spiro, a partner at Lauressa Advisory, emphasizes the importance of recognizing and addressing these emerging political risks in the financial markets.