The Financial Post reports in its Wednesday edition that the U.S. midterms are less than two months away and look particularly difficult to hedge. A Bloomberg dispatch to the Post says stocks tend to be weaker in the run-up to elections, only to rally afterward. This time, the bigger challenge may emerge further down the road if the Trump administration finds it harder to push through policies. The biggest challenge for markets would be a Democratic sweep. Bank of America's Michael Hartnett expects a big flight from risk in such a scenario, including a slump of more than 10 per cent in stocks, a weaker U.S. dollar and stronger bonds. The best hedge against such an outcome is to short financials and the greenback. A surprise Republican sweep would likely trigger big risk-on moves, including a "green light for an AI bubble" and a stronger dollar. A scenario of "GOP Senate, DEM House" would see a modest risk-on response, where "gridlock equals Goldilocks," Mr. Hartnett said. Last week's jobs data indicated the U.S. economy was still running strong, while the Global benchmark Brent crude is close to $100 (U.S.) a barrel. U.S. Federal Reserve officials have made it clear that Friday's inflation print will be key for rates.