Nomura warns: The market has over-hedged Trump's trades, a "Harris surprise" may occur

Nomura's Managing Director and Cross-Asset Macro Strategist for the Americas, Charlie McElligott, warned in his latest report that in recent weeks, markets have over-hedged on the assumption of Trump and the Republican Party winning both houses of Congress. There could be a risk of reversal across all types of assets if Harris' support rate is higher than expected and the election ends up in a stalemate. This is because in the next few days and following two weeks, there will be massive issuances by the U.S. Treasury Department ahead of fiscal year 2025 for federal government including issuing $70 billion five-year U.S. bonds, $69 billion two-year bonds, $44 billion seven-year bonds; releasing JOLTS job vacancy numbers; announcing new refinancing from Treasury Department; personal consumption expenditure (PCE), non-farm payroll data (NFP); US Presidential Election Day; and November FOMC meeting.(zerohedge)