Saxo Bank: US election biggest political risk in several decades

Headwinds for equities

Saxo Bank has warned that a contested US presidential election or a Joe Biden victory could lead to increased market volatility.

In its Q4 outlook, the banks said markets are failing to price in the risks and volatility resulting from various US election outcomes. "We fear that the US election is the biggest political risk we have seen in several decades," said Steen Jakobsen, chief economist and CIO at Saxo Bank. "Our job is to define consensus versus reality and here we feel that the market is not properly pricing in both the risks of a contested result - the biggest risk for the markets, whether as a result of the contest itself or Trump's objections and attempts to cry foul - or a clean sweep by Biden. Sinc...