November 8th will see millions of Americans take to the polls in the most divisive election in the nation’s history. While Clinton has spent 30 years playing the political game, Donald Trump has defied expectations, his critics and convention to end up only a few short weeks away from the most powerful job in the world. As we saw with Brexit, currency is where investors and speculators will play out their thoughts and expectations of what will happen and who will win. Our webinar is an in-depth look at the US and world economies in the event of either a Clinton or Trump administration as well as the currency winners and losers.

1. Currency and Clinton,
Trade and Trump:
World First’s US Presidential
Election Webinar
26th October

2. Jeremy Cook
Chief Economist and
Head of Currency Strategy

3. • Clinton vs Trump
• The Electoral College
• The Downticket
• Who will win?
• Currency reactions
• Terms of Trade
• Implications for US and Global Economics
• Conclusions
• Questions
The US Election and You

4. • Clinton views her ascent to the Presidency as somewhere between a divine right and a
duty to the Democratic Party. Sanders battled hard in the Primary and may have made her
tack to the Left to appeal to protest voters. Represents a continuation of the US under the
Obama regime with a more involved Foreign Policy.
• Trump is the ultimate protest vote and has spent his short but meteoric political ‘career’
confounding and demolishing expectations. Policy is a moveable feast of populist,
nationalist and quixotic ideas that have only a passing resemblance to typical Republican
sensibilities.
• Election is between two extremely polarising, dislikeable characters and the campaigns will
hopefully mark a nadir in political discourse.

5. Data courtesy of 538

8. Data courtesy of 538

9. Midnight
• Georgia: 16 votes
Indiana: 11 votes
Kentucky: 8 votes
South Carolina: 9 votes
Vermont: 3 votes
Virginia: 13 votes
0.30am
• North Carolina: 15 votes
Ohio: 18 votes
West Virginia: 5 votes
1am
• Alabama: 9 votes
Connecticut: 7 votes
Delaware: 3 votes
District of Columbia: 3 votes
Florida: 29 votes
Illinois: 20 votes
Maine: 4 votes
Maryland: 10 votes
Massachusetts: 11 votes
Mississippi: 6 votes
Missouri: 10 votes
New Hampshire: 4 votes
New Jersey: 14 votes
Oklahoma: 7 votes
Pennsylvania: 20 votes
Rhode Island: 4 votes
Tennessee: 11 votes
1.30am
• Arkansas: 6 votes
2am
• Colorado: 9 votes
Kansas: 6 votes
Louisiana: 8 votes
Michigan: 16 votes
Minnesota: 10 votes
Nebraska: 5 votes
New Mexico: 5 votes
New York: 29 votes
North Dakota: 3 votes
South Dakota: 3 votes
Texas: 38 votes
Wisconsin: 10 votes
Wyoming: 3 votes
3am
• Arizona: 11 votes
Iowa: 6 votes
Montana: 3 votes
Nevada: 6 votes
Utah: 6 votes
4am
• California: 55 votes
Hawaii: 4 votes
Idaho: 4 votes
Oregon: 7 votes
Washington: 12 votes
6am
• Alaska: 3 votes

10. • All House of Representatives members (435) are up for election once again as well as 34
Senate seats and 12 Governors on November 8th.
• Currently the Republican Party holds majorities of 30 seats in the House and 4 in the
Senate. A split in the Legislative and Executive branches can lead to policy gridlock, as we
have seen in Obama’s 2nd term compared to the 1st, at least until the Midterms
• A Clinton win should allow for a Democratic Senate majority as the correlation has
increased between Senate and Presidential voting.
• Democratic control of the House is a much taller order and we doubt it will take place.

12. • Clinton win still very much priced into markets with some bellwethers of Trump risk (MXN, Asian
manufacturing exporters) riding lower on any increase in polling intention for Trump.
• On the basis of a Clinton win we anticipate a slight run lower for the USD, JPY and EUR as investors
bid up EM risk on lower risk aversion sentiment. GBP would likely benefit against the USD but little
elsewhere. Shares to rise globally in a brief and uninspiring relief rally.
• A Trump win will see a dramatic jump into perceived risk havens at the expense of risk, commodity,
emerging and frontier currencies. RUB may outperform.
• Given the relative pricing of markets compared to Brexit, a 5-8% jump in the value of USD upon the
announcement of a Trump is entirely possible.
• My trades list for a Trump win is: sell Mexico, CE3, Asian manufacturing exporters, domestic Korea,
domestic Taiwan; buy gold miners, Russia, domestic China, energy.

13. • Trump has been outspoken on many
things during the campaign but trade has
been a long-held position of confrontation.
• We foresee a ‘trade war’ with China over
tariffs, currency levels, jobs and
investment and with Mexico over
immigration and the wall.
• May allow for freer flow of funds back into
the country from foreign domiciled US
companies.
• Clinton has changed her mind on TPP and
TTIP to now oppose having been a vocal
proponent. 0
100000
200000
300000
400000
500000
600000
700000
Total Trade with US ($M)
Data courtesy of Bloomberg

14. • Higher protectionist measures, thereby a cut in globalisation, typically will lead to an increase in
inflation and a slowing of growth
• Both Clinton and Trump have advocated fiscal policy measures in an effort to boost growth but that is
where the similarities end. Although fiscal plans, most notably Trump’s, have had some modifications
in recent days, the general picture is one of more aggressive fiscal expansion under Trump, largely
through tax cuts (both income and corporate), than under Clinton.
• Congressional picture for tax cuts (Trump) and education and healthcare spending (Clinton) are
crucial
• Expansionary fiscal policy is likely to tighten the US output gap, increase inflationary pressure and
invite tighter monetary policy (higher interest rates) although this is dependent on the relation with the
Federal Reserve.

15. • We foresee a Clinton win by a bit of a landslide in the Electoral College but a tougher deal in the
popular vote
• As seen with Brexit a ‘black swan’ event cannot be completely priced out of markets and remains a
very real possibility with a fortnight of the campaign to go
• Markets have never appropriately priced Trump risk and a win for the Republican candidate would be
a larger global market shock than that of Brexit
• We are moving to a global conversation of looser fiscal policy in Western economies and this will take
place under either candidate
• A trade war is the last thing that the global economy needs right now

16. Questions

17. • These comments are the views and opinions of the author and should not be construed as advice. You should act using your own information and
judgment.
• Whilst information has been obtained from and is based upon multiple sources the author believes to be reliable, we do not guarantee its accuracy and it
may be incomplete or condensed.
• All opinions and estimates constitute the author’s own judgment as of the date of the briefing and are subject to change without notice.
• Any rates given are ‘interbank’ i.e. for amounts of £5million or more thus are not indicative of the rates offered by World First. World First UK is registered in
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