The world's largest asset manager: The possibility of a "difficult birth" of the US election results is underestimated!

BlackRock Investment Institute warns that the market may be underestimating the risk of any U.S. presidential candidate questioning the election results next month.

Boivin, Managing Director of the research department of BlackRock, the world's largest asset management company, believes that a controversial election result could lead to "weeks of highly disruptive legal battles," which could disrupt asset prices.

U.S. Treasuries have been struggling in a sell-off, with the benchmark 10-year U.S. Treasury yield rising more than 40 basis points this month, while the stock market remains near historic highs.

Boivin said in an interview that "trying to trade the U.S. election is 'futile'" and "the most concerning scenario is a disputed election scene." He said, "I don't think this scenario has been priced in, and if you want to be prepared for a situation that requires a response, I think this is one of the potentially market-unfriendly situations."

The intense competition in the U.S. presidential election has made it increasingly likely that voters and investors may have to wait for the final results until after election day, especially if any candidate chooses to challenge the vote count in one of the key swing states.

In recent days, the betting market has been increasingly optimistic about a Trump victory. The likelihood of this outcome has pushed a measure of the dollar to a three-month high and is set to deliver the best month since 2022. According to Standard Chartered Bank, about 60% of the recent rise in the dollar can be attributed to the prospect of a Trump victory.

Meanwhile, the rise in U.S. Treasury yields is partly due to the potential for Trump to impose high tariffs during his presidency, thereby increasing inflationary pressures