US: Trump Takes Lead In Betting Markets For First Time Since Early September

Former President Donald Trump has overtaken Vice President Kamala Harris in betting market probability of winning the White House for the first time since early September, according to ElectionBettingOdds - a website that aggregates real-time data from various betting and prediction markets. 

• Betting markets now diverge from all the key election forecast models - The Economist, DDHQ, 538, Split-Ticket, and Silver Bulletin - which all forecast a slight Harris lead.
• It is likely prediction markets are pricing potential political fallout from an expansion of the Middle East crisis. Although conventional wisdom suggests that foreign policy rarely impacts presidential elections, the narrow margin of the race makes any sentiment shift in key states consequential. Harris is particularly vulnerable in Michigan, a swing state with a sizeable Arab-American and Muslim population. According to Silver Bulletin, Michigan is the second most likely state to determine the winner, after Pennsylvania.
• Bettors may also see a boost for Trump from his Pennsylvania rally on Saturday, which saw billionaire Elon Musk appear alongside Trump for the first time.
• Sky News noted on Musk's appearance: “The core message from [Musk] was to get out and vote. "Make sure you're registered," he said, suggesting a campaign nervous about turnout.”
• Traders may also see a slight bump for Trump in the Rust Belt from Vice Presidential candidate JD Vance's (R-OH) strong showing in his debate with Governor Tim Walz (D-MN).  

Figure 1: Presidential Election Winner, %Implied Probability of Winning