Citigroup has offered hedging tips if markets begin to price in the possibility of Republican candidate Donald Trump winning the election.
Polls are showing the U.S. presidential contest tightening, Citigroup noted in a note dated Sunday, reducing its probability of a win for Democratic candidate Hillary Clinton to 60 percent from 65 percent, with a 40 percent probability of a Trump win.
But if markets begin to price in an 85 percent probability of a Trump win, there were several hedging plays, Citi said.
For one, the bank expected plenty of U.S. dollar strength, particularly against emerging market currencies.
Citi predicted that U.S. credit spreads, or the yield difference between U.S. Treasurys and corporate bonds, would widen amid concerns about headwinds to global trade from Trump's protectionist policies and from the risk of a recession.
Along with that, Citi expected global equities would fall for the same reason. It added emerging market equities would also take a hit from the stronger U.S. dollar.