The US mid term elections made simple
Today the American voters will decide on it's members of Congress. Congress is the collective term for the House of Representatives and for the Senate. At present both of these houses are controlled by Donald Trump's Republican Party. However the mid-term elections will decide whether Donald Trump gets to keep pushing his legislative agenda ('America first policy') through the House of Representatives. If that house falls to a Democrat majority then Donald Trump will have his wings 'clipped'. If the Senate falls to the Democrats as well then Donald Trump could end up being 'shot out the sky' via being impeached. This is the worst outcome for Trump.
One thing that has struck me about these elections are just how unpopular Trump is on a historical poll level compared to other Presidents. Check out the low approval rating he has below.
The most likely, and expected outcome, going into the elections is for the House of Representatives to flip to Democrat control.
The Senate which only has 35 out of the 100 seats up for election should stay in Republican control with only a 16.8% chance that it falls to the Democrats.
So, going forward it looks like a 'Trump lite' next session of his Presidency. This is the market expectation, so any deviation from this will see a reaction. Total Republicn control = dollar and equities bid. Total Democrat control= dollar offered. Whether those reactions will be sustained remains to be seen from the initial reaction on the result.
