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2020/10/13 / Erste Group Research

Waiting for 2021

Is anyone still able to imagine a world in which neither COVID-19, nor President Trump and Brexit dominate the headlines? And yet, that is what 2021 could look like. The prospect of a vaccine becoming available at the turn of the year was only recently held out again by the head of the WHO, three weeks before the election the challenger for the US presidency, Joe Biden, leads the incumbent president in the polls by up to 10 percentage points, and the future relationship between the EU and the UK is likely to be decided one way or another in coming weeks. This could mark the beginning of a new era. To varying degrees Brexit and President Trump have occupied us for four years, and COVID-19 almost exclusively for one year.

However, we are not there yet. The number of COVID-19 infections is still increasing in Europe. President Trump could doubt the outcome of the election if he is defeated, which could lead to a potentially several weeks-long domestic political crisis in the US. Brexit will definitely bring about changes. However, an assessment of their magnitude will not be possible before early 2021.

How will market participants position themselves in this environment? We believe that they are currently in wait-and-see mode. The question will be: When will the biggest hurdle be cleared that has blocked the way to 2021 and its potential? We cannot answer this question, but it should happen in coming months.

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General information

AuthorErste Group Research
Product nameInterest Rate Outlook Eurozone, USA
Topic in focusMacro/ Fixed income
Economy in focusEurozone, United States
Currency in focusEuro, US Dollar
Sector in focus-


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