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### POV: SPLIT CONGRESS PRICED IN - Not a...>

US TSYS
US TSYS: ### POV: SPLIT CONGRESS PRICED IN
- Not a lot of trade flow in the lead-up to Tuesday's Midterm elections,
implying markets have priced in/already positioned for a split Congress:
Republicans retaining control of the Senate, while Democrats take control of the
House. 
- Democratic House odds moderating. Prediction market-implied probability of
Democrats recapturing the House had fallen from 66% to 65% (PredictWise, an
aggregator) late last week, while current chances of same outcome have fallen to
0.61% from 0.65% on PredictIt. Non-core results, market reacts: 
- Blue Wave meets Red Wall? If Republicans retain control of both the House and
Senate, risk-on w/ equities rallying markets price in additional stimulus vs. a
sell-off in Tsys as Fed policy normalization gets more aggressive. Caveats:
potential negative trade-war impact on world economy; will the Fed crack under
renewed jawboning from Pres Trump?
- Democrats take control of House and Senate: highly unlikely, but expect vol to
spike either way.

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