US voters will go to the polls for the midterm election on 8 November. Markets tend to react positively to the checks and balances associated with a Congress that is not completely aligned with the president, economists at ANZ Bank note.

Bond market would welcome a divided Congress

“The USD and equity markets tend to finish the month higher after midterms.”

“Markets appear to like the checks and balances that are associated with a split between Congress and the president. This would be pertinent this time, given concerns of more policy-induced inflation pressures that would come from a D-controlled Congress.”

“The bond market would welcome a divided Congress owing to concerns over further policy-induced inflation pressures that would come from a Democrat-controlled Congress.”