Early Monday morning, one of the world’s most profitable currency trades unraveled, triggered by a twist in Mexico’s elections that few saw coming. Twenty hours later, investors in India began frantically dumping stocks, leading to a one-day blowout of $386 billion, as they realized they had seriously misjudged the size of Narendra Modi’s election victory.
Around the world, surprising results in some of the largest developing countries illustrate how much markets depend on the politics of 2024 – and the pitfalls of relying on opinion polls to predict the outcome.
From Mumbai to Mexico City, Election Year – in which 40 countries will hold national votes – is already setting investors on fire, providing an early warning as elections in the European Union and Britain approach, and five months before the US presidential election. Often, predictions accurately predict top outcomes, such as Claudia Sheinbaum’s landslide victory to become Mexico’s first female president, while failing to pick up more nuanced outcomes, such as how many seats Modi’s party would have in parliament.
