Nordea Markets' analysts note that a formal inquiry to impeach Donald Trump has been announced by the speaker of the house Nancy Pelosi earlier this week, after details of a call between Donald Trump and the Ukrainian president Volodymyr Zelenskiy emerged.

• “The Democrats allege that Trump has blackmailed Ukraine into investigating Sleepy Joe Biden and his son. We don’t get what all the fuss is about. First, it’s still hard to see a smoking gun. Second, if the Democrat-controlled House of Representatives moved to impeach Trump, they would still need 2/3 of the votes in the Republican-controlled Senate to ultimately convict him.
• Markets price in more than 60% probability that an impeachment process will start, but the market is not convinced that it will matter, as the betting markets also firmly expect Trump to complete his first term.
• And do the Americans at all want an impeachment process? Trump is basically as popular as ever (during his presidency), so maybe this whole impeachment show could work to Trump’s advantage, as it could enliven his base. The interesting market pattern is that what is good for Trump is good for the USD. We remain positive on haven assets (and the USD) in the short to medium term. A strong Trump during an impeachment process probably means more geopolitical noise.”