A Democratic sweep in next month’s US election would boost Asian equities, while reducing the allure of the region’s bonds, according to money managers and strategists.

A Joe Biden victory along with Democrats winning control of both houses of Congress is likely to spark substantial fiscal stimulus, benefiting Asian stocks by reviving the US economy and trade flows, according to BNP Paribas Asset Management and Credit Suisse. Such a backdrop could push Treasury yields higher, curbing appetite for debt from countries such as South Korea and Thailand, historical patterns show.

“The real key is what happens with Congress, more so than what happens with the presidency,” said Daniel Morris, senior investment strategist at BNP Paribas Asset Management in London. “Markets will focus more on the fiscal stimulus as opposed to any big increase in taxes. If US growth improves, they’re going to be importing more from Asia.”

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