(The author is editor-at-large for finance and markets at Reuters News. Any views expressed here are his own.)
By Mike Dolan
LONDON, June 5 (Reuters) - If financial markets are beginning to price in November's U.S. presidential election, they show little concern yet about the chances of a change at the White House.
Global investors seem squarely focused on the reopening of major economies after almost three months of coronavirus lockdowns and unprecedented central bank and government policy support for households and businesses.
After the pandemic shock wiped a third off their value, stock markets are recapturing their losses as investors bet on a sharp third-quarter rebound with no second wave of infections.
But markets -- inherently forward-looking -- have shown remarkably little reaction to changes in polling around 2020's setpiece political event.
Shifting public opinion about Washington's handling of the coronavirus and nationwide protests over the death of unarmed black man George Floyd in police custody have over the past two weeks transformed the odds on Donald Trump's re-election.
Reuters/Ipsos opinion polls released on Tuesday show Joe Biden leading Trump by 10 percentage points -- the biggest margin since the former vice president became the Democratic party's presumptive nominee in April.
Hillary Clinton also led Trump at this point in 2016, but her advantage was mostly less than 5 points.
Other polls concur with a drop in Trump's approval ratings over recent weeks and betting and prediction markets are moving that way too. UK bookmakers now have Biden as 10/11 favourite. The closely watched 'PredictIt' site puts Biden 9 points ahead, compared with a 5-point lead for Trump on May 5.
And yet financial markets have powered on regardless. Wall St's Dow Jones index -- long held up by Trump as a reflection of his success -- has jumped 10% since early May, while the tech-heavy Nasdaq is up 13% and the S&P 500 8%.
If markets are worried about Trump's exit or Biden's economic plans, then they're either paying the polls no heed or feel it's too early to take a position. Many investors say the real action won't start until campaigning begins in earnest in September following the party conventions.
Brown Brothers Harriman economist Win Thin said the protests appear to have dented Trump's chances, but added: "Still, it's a long way to November." Dutch bank ING concurs: "The race remains unpredictable."
This seeming insouciance may just be relative.
For all Wall St's gains, the S&P 500 has underperformed equivalent euro zone and Japanese indexes by up to 5 percentage points since May 1, while the U.S. dollar has dropped 3% against a basket of other major currencies and 5% against the euro.
That could reflect overseas investor nerves -- or easily be explained by other events. Europe's economies are already starting to reopen and massive post-pandemic fiscal stimulus plans are being put in place -- 750 billion euros for the European Union's Recovery Fund and another 130 billion euros in Germany.
Trump has anyway been no fan of a rising dollar over the past four years, frequently accusing other countries of unfairly trying to weaken their exchange rates.
Some see how the election plays out for U.S.-China relations as the biggest issue for markets.
Trump has recently doubled-down on Beijing over trade and security, its alleged failure to stop the pandemic and its intervention in Hong Kong, threatening everything from trade sanctions to investment and travel curbs.
"Financial markets are ill-prepared for a resurgence in trade tensions," said Manulife Investment Management economist Frances Donald. "We're inclined to think that more political capital could be gained from striking an aggressive tone ahead of the election and perhaps then resolving any issues by November."
TS Lombard's Chris Granville thinks "peak danger" on China relations may be close to the election, depending on the polls.
Yet Biden's Democrats are also expected to be tough on China even if the style and tone is different.
Markets also seem unruffled by speculation that Biden will tax and spend more -- or at least not replicate Trump's tax-cutting. That may be because the extraordinary pandemic policy support has underlined that high deficits can be run while borrowing costs are kept low by the U.S. Federal Reserve.
Some of the tenets of Modern Monetary Theory, supported by the left of the Democratic party, are already playing out and the cosseted U.S. Treasury market has barely twitched over the past month either.
Or perhaps a change of U.S. president has less influence than people assume.
"Beyond possible sectoral effects, history suggests the election will not have any major market impact -- at least not against the simply huge changes in interest rates and discount rates surrounding the pandemic policy response," said Joe Prendergast, global strategic advisor at Goodbody.
By Mike Dolan; Graphic by Saqib Ahmed; Editing by Catherine Evans Twitter: @reutersMikeD