<h2>&#34;Trump Trade&#34; Makes a Comeback</h2>
Both Bitcoin and the US Dollar Index have strengthened, while US bond yields have risen, reflecting the market's expectation of Trump 2.0 reigniting inflation and repricing the financial markets for Trump's return.
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Currently, Trump's probability of winning far exceeds Harris. According to the more sensitive prediction market data from Polymarket, the market expects Trump to have a higher chance of winning. As of October 17th, Trump's probability of winning has surged to 61%, surpassing Harris by 12 percentage points.
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Looking at the swing state support rates, Trump has completely overtaken Harris. The US presidential election has always been &#34;whoever wins the swing states wins the world&#34;. As of October 17th, Trump's support rates in major swing states have all surpassed Harris. In addition to leading in Arizona, North Carolina, and Georgia, he has also made a comeback in Nevada, Wisconsin, Michigan, and Pennsylvania, with Michigan seeing the highest reversal at 0.9 percentage points.
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<h2>Impact on Assets in Different Scenarios</h2>
Overall, historically, in the three weeks before the election, the market begins to price in a Republican president, with market performance better under a Republican president than a Democratic one. However, the smooth implementation and execution of the president's policies, especially in Congress, are crucial.
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Based on betting odds (more sensitive and directional), we have outlined four scenarios based on the president's party affiliation and deduced their impact on asset prices:
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Scenario One: Republican Sweep (43%), US Stocks &gt; US Dollar &gt; Gold &gt; US Bonds. On one hand, Trump's smoother implementation of his policy proposals, including significant tax cuts for domestic companies and relaxed regulations, along with more &#34;America First&#34; policies, benefit US stocks. On the other hand, policy resonance (tariffs + immigration tightening) increases the reflationary pressure in the US, potentially boosting the US dollar, while putting selling pressure on the long end of the US bond market
Scenario 2: Trump + Republican Senate, Democratic House (15%), US stocks &gt; USD = gold &gt; US bonds. Trump faces a divided House with &#34;fiscal power&#34;, which will limit his policy implementation. This means that his external tariff and internal tax reduction policies will face greater challenges, reducing the likelihood of further tax cuts for businesses, resulting in only a moderate increase in US stocks.
Scenario 3: Democratic sweep (14%), USD and US stocks weaken. Considering her tax increases on businesses affecting US stock profits and tax increases on the wealthy impacting risk appetite, overall, there is significant pressure on US stocks. Additionally, if the economy enters a recession, the USD will weaken. However, Harris's fiscal policy is not radical, so there will not be a significant increase in debt, and the upward pressure on US bond interest rates will be less than in the case of Trump's election.
Scenario 4: Harris + Republican Senate, Democratic House (24%), US stocks may show weaker performance. The House has a significant role in controlling government spending, so a unified House and President are favorable for implementing Harris's fiscal policies, such as increasing taxes on businesses. Under this scenario, there will be short-term pressure on US stocks, but opportunities can be sought structurally. Other assets will show neutral performance.
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Based on the current market assessment, the probability of a Republican &#34;sweep&#34; is the highest. However, two points regarding market volatility need to be monitored:
1. Deviation in mail-in ballots. With more voters opting to vote by mail post-pandemic, swing states tend to have slower mail-in ballots, potentially leading to a &#34;tortoise and hare&#34; effect in the later stages.
2. &#34;Constitutional crisis&#34;. In 2016, Hillary led Trump in support, but Trump ultimately won with a 306:232 margin; similarly in 2020, Trump refused to accept the election results, creating an unprecedented situation of not acknowledging defeat. If a potential &#34;constitutional crisis&#34; reoccurs, it will increase market volatility and lead to confusion in trading signals.
Article authors: Chen Meng, Ge Xiaoyuan, Chen Li, Source: Chen Li lichen, Original title: &#34;Trading the US Election in Four Scenarios&#34;

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Soochow Securities Co., Ltd. analysis believes that the current market assessment indicates the highest probability of the Republican Party winning in the U.S. presidential election. If the Republican Party sweeps the election, it will benefit U.S. stocks, the U.S. dollar, and gold, while putting selling pressure on the U.S. bond market. Market expectations for Trump's re-election are rising, with betting data showing his chances surpassing Harris. Depending on different scenarios, if the Republican Party wins, U.S. stocks will outperform other assets, especially if policies are smoothly implemented

- The article discusses the potential impact of the upcoming U.S. election on financial markets, highlighting a resurgence in support for Trump, with his winning probability rising to 61% as of October 17.  
- It outlines four scenarios based on party control and their expected effects on asset prices, indicating that a Republican sweep could lead to stronger stock performance, while a Democratic win may weaken both stocks and the dollar.  
- The authors caution about market volatility due to factors like mail-in voting delays and the possibility of a constitutional crisis, which could disrupt trading signals.

Trading the U.S. Presidential Election in Four Scenarios