FXStreet reports that economists at UBS expect markets to remain more volatile than normal, notably into the US election.

“Whatever the outcome of the US election, we think new stimulus will be rolled out after the vote and lift economic growth. The second most likely outcome is the status quo in our view. This scenario presents the risk of fiscal policy gridlock, which would further contribute to volatility. But even in this scenario, we would expect some stimulus measures to pass.”

“Successful vaccine trials will increase certainty about the economic outlook. Critical Phase 3 efficacy data for the most advanced vaccines in development is likely this month or next..”

“Central bank policy is making the long-term case for equities over cash even clearer. The Fed projects that rates will remain on hold until at least the end of 2023. At the same time, the shift to average inflation targeting suggests policymakers may be willing to accept a period of moderately higher inflation. Real returns on cash are likely to remain negative, and cash lump sums can deplete quickly when we consider the possibility that personal spending may rise more rapidly than interest rates. For investors looking to draw on their savings to fund their spending, this combination of factors makes it more important to be invested in growth assets.”