Global election year: How major elections could shape global economic outcomes in 2024

In 2024, the global political landscape is set for an exciting time, with more than 60 relevant economies heading to the polls. The 2024 elections will test relations between nations and, more importantly, shape monetary policies that will affect investors trading in commodities and currencies.

US elections

The spotlight is on the US election cycle. This comes at a time of easing inflation, after an intense tightening period that saw 11 successive rate hikes positioning the rate within the 5.25% – 5.50% range. The year 2023 alone saw 4 hikes that culminated into a 100 basis points raise.

After a protracted period of rate hikes, monetary policy analysts predict a “soft landing” in 2024, with the US economy now running at a softer pace. Growth is expected to register at a healthy 1.4% annualised rate this year. 

Despite concerns about what rate policy could mean for the election, historical data shows that an electoral process hardly ever upsets the apple cart. Interest rates were maintained for 6 to 12 months before the 2000, 2012, 2016, and 2020 polls, and many other years before and after.  

UK elections

In the UK, elections are expected to take place either in the second half of 2024 or no later than 28 January 2025. The Tories will fight to keep the premiership away from Labour in what could be a tight race if Rishi Sunak’s party makes political gains in the next few months. 

Possible impacts of election results

We look at how the US and the UK may fare if either party wins the poll.

United States

Election date: Nov 5

Key candidates / parties: Democratic Party, Republican Party

Impact of incumbent win:

• Stability in policies
• Potential rise in prices with increased corporate tax likely
• Stable climate change investment
• Continued military aid to Ukraine
• Trade-friendly policies

Impact of opposition win:

• Policy uncertainty
• International tensions due to likely trade tariff hikes
• Reduced spending on climate change
• Possible withdrawal of  Ukraine aid
• Increased tensions with China
• Business-friendly policies

United Kingdom

Election date: To be determined

Key candidates / parties: Conservative party, Labour party

Impact of incumbent win:

• Tax cuts for businesses
• Grid and renewable energy investment
• British-first business support policy
• Flat ties with the EU

Impact of opposition win:

• Changes in economic policy
• Robust green energy infrastructure
• Investment plan
• Higher taxes for the rich with end of non-dom tax rules
• Increased capital gains tax
• Better ties with the EU

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Historically, US markets have demonstrated a pattern of improved post-election returns after a muted showing in the months preceding the polls. As such, traders, particularly those focusing on the S&P 500, should closely monitor market movements as part of their strategy to make informed decisions for their mid to long-term investments.

Key Asian elections to watch out for

We also look at 2024 elections in key Asian economies and their significance to policy direction, geopolitics, and market direction.

The outcomes of elections in major economies could lead to significant policy shifts or the maintenance of the status quo. In particular, the US election results will have a notable effect on the prices of commodities, stocks, and currencies. Traders should keep an eye on political developments to stay ahead of any market movements.

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