KEY THEMES
With the U.S. Presidential elections almost behind us, it looks like Joe Biden, a Democrat, will be the U.S. 46th President of the United States. This means that Donald Trump, a Republican, will be the first U.S. President who could not secure a second 4-year term in 28 years. Ironically, the last U.S. President that could not do just that was also a Republican: George Bush, Sr. who lost to the Democrat Bill Clinton in 1992. Still, it is early to tell what this could mean for the world economy at large, especially when the Senate is likely to remain dominated by the Republicans, while the Democrats are still a couple of seats short to claim majority at the House of Representatives. This sort of legislative gridlock may be good for U.S. companies as potentially higher corporate taxes could be blocked. That said, generally speaking, we believe global investors will be looking forward to less aggressive stance by the United States when it comes to global trade, especially with China. Indeed, global investors have been pricing in a Biden win by bidding global stock prices and overall commodities higher.
Back home in Egypt, investors should look forward to a few events as we kick off the second week of November today. First off, from the top down, the Central Bank of Egypt (CBE) will hold its Monetary Policy Committee meeting this Thursday (12 November), leaving only one last meeting in December before the year is over. We are of the view that the CBE may opt to keep rates unchanged this time around, with a higher probability to cut rates further by 50bps in the December meeting. We will run a full story about this in our Thursday’s issue, explaining our rationale.