US presidential election outcome: Joe Biden has enjoyed a remarkably stable lead in the national polls this year. Currrently, he is leading President Trump by 7.6%, according to our poll of polls, down from a peak of 10.4% in June. However, we believe the race is much closer, at around 50/50, with a small Biden edge. The outcome remains uncertain for different reasons. Firstly, while Biden's lead in the national polls is significant, his lead in the swing states is only 3.9%, and in many states, his lead is within the margin of error. We expect the election to be determined by a handful of swing states, including Arizona, Florida, Georgia, Michigan, North Carolina, Pennsylvania and Wisconsin. In addition, turnout will be critical. We are anticipating record turnout, with the highest number on record voting by mail. Overall, the public has a net negative approval rating for Trump of -9.6%, according to our poll of polls. However, Trump enjoys a positive net approval rating of 4.0% on his handling of the economy, which could help him gain more popular support if the economy gains momentum. Key themes for the candidates: There are three main themes in Trump’s campaign: law and order, China, and Biden’s fitness for office. Biden is campaigning on economic policy (“Build Back Better”), healthcare, racial justice and morality. Biden is planning another fiscal stimulus package to address immediate economic issues tied to the pandemic. Also, he has plans for a major infrastructure investment and supports a modified version of the Green New Deal. Biden plans to boost Obamacare and prescription drug reform. Both candidates will have to deal with the long-term issue of rising inequality. Investment implications: The dollar should stay weak in the medium term, due to the re-emergence of twin deficits and an escalating debt/GDP ratio, together with the Fed’s long-term commitment to near-zero rates. If the prospects of a Trump re-election increase, we could see the dollar appreciate temporarily based on concerns regarding the prospects of heightened trade tensions and broader geopolitical uncertainty. In any case, we expect to see near-term market volatility around election time. The greatest risk to short-term market dynamics is an undecided race. Depending on the winner, certain market sectors may respond differently. Big tech, defense, financials and carbon energy sectors are likely to perform better under Trump while renewable energy and infrastructure-related sectors will be winners under Biden. Under both scenarios, we believe that ESG investing will gain increasing traction globally, with rising investor pressure for increased disclosure and enhanced ESG practices, supported by accelerating ESG equity flows, including in the United States and despite Trump’s backtracking. Should Trump be re-elected, the theme will continue to gain traction, albeit not at the same level should there be a Democratic sweep. International relations: US-China relations are likely to prove difficult. In addition to the ongoing tech war, capital war on foreign holdings, and re-shoring of the global supply chain, the current situation in Hong Kong introduces the risk of US sanctions on Chinese banks and an exclusion from the dollar system. Hence, the phase-one trade deal appears on hold for now, with little hope for a phase two deal. Accidental confrontations in the South China Sea or in the Taiwan Strait might push the situation to a point of no return. US-EU relations have deteriorated significantly under Trump. Some improvement is likely under a potential Biden presidency while further trade barriers may be decided on if Trump is re-elected.