Watching the first US presidential debate in full flight, and although the content and the process have held no surprises, it has left me exhausted just watching it. Apart from the challenges of Mr Biden getting a word in sideways, there were no surprises, although the former is not really a surprise.
Markets have remained calm as no policy surprises have emerged from the debate so far. US equity index futures have rallied in Asia after falling overnight, as the uncertainty ahead of the debate has subsided.
China PMIs indicate expansion
Lost in the noise of the debate, and noisy it was, China has released another impressive set of data. Official manufacturing and non-manufacturing PMI’s outperformed expectations, rising to 51.5 and 55.9, respectively. The Caixin Manufacturing PMI held steady at 53.1, and both datasets are firmly in expansionary territory, highlighting that China’s recovery remains well on track.
Mainland China heads on holiday for a week from tomorrow and will be joined by Hong Kong and Taiwan. South Korea is on holiday today and again on Friday. The net effect will be to mute activity in Asia today.
Looking ahead, the next key data point will be Fridays’ Non-Farm Payrolls data. With no sign of any follow-up fiscal stimulus package from Washington DC, despite multiple calls from the Federal Reserve, markets will be concerned that the US recovery may stall. A poor number on Friday will amplify those fears and could set markets up for a weak finish to the week.
While today’s presidential debate will be analysed and debated to death, the reality is, is that Mr Biden just had to show up and not slip up for it to be a Faustian victory. My initial thoughts are the debate will not move the needle on the Democrat lead in the national polls. The real race this election is for the US Senate and not the presidency, and whether the Republicans can block a Biden economic agenda, or whether the Democrats have a clear road ahead via control of both houses and the presidency.
Next week’s vice-presidential debate will receive more attention than is usual. With Mr Biden likely to be a one-term President, his running mate, Kamala Harris will be under the spotlight. While Mr Trump and Mr Biden are the present, and some may argue the past, Mr Pence and Ms Harris are the future, one that may arrive sooner rather than later. Their debate performances are arguably more crucial to the outcome of the US elections than those of their bosses.