Investor concerns about the outcome of the US presidential election have caused substantial currency and equity market movements in the past few weeks. However, the Vix “fear gauge” has not yet risen as far as it did in the immediate aftermath of the UK referendum or other recent economic shocks. This may be because the latest economic news has been reassuring. We estimate that global growth accelerated in the third quarter as the US and Chinese economies expanded at a healthy pace and European growth held steady. Meanwhile, headline inflation has edged up as the effects of the past slump in oil prices have begun to drop out of the annual comparison.
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