Goldman Sachs economists say that economic indicators are a better forecaster of election outcomes, but only if you are looking at the right ones:
- “The real economy matters more than financial markets. Broad economic variables like income, employment, and consumption matter more than market-based measures like equity prices”
- growth and labour market data have typically been a better guide to election results than inflation
- but, if you must look at inflation, then headline inflation (ie the CPI that includes food and gasoline prices) has a stronger relationship with election results than core inflation
Dunno about anyone else but I am not looking forward to this rerun.
This article was written by Eamonn Sheridan at www.forexlive.com. Source