Citi: US election could be worse than any black swan

The presidential election has the potential to cause considerable volatility and could possibly re-price a number of markets across the globe, analysts at Citi highlighted in a new note on Monday.

"With huge uncertainty around the outcome and the consequent shape of economic and political policymaking, many asset prices are likely to see increased volatility. This, in itself, could provide a considerable headwind to growth," analysts at the bank, including Tina Fordham, said in the note.

"Time and time again we have seen unexpected events cause strong short-term moves in markets that have then dissipated as the policy response bites and the core themes re-assert themselves," it said.

Thus, investors are expected to be on their toes as the year progresses with Citi suggesting an unexpected outcome to a widely anticipated event – like the election – could cause a significant and potentially lasting re-pricing of assets on both a domestic and global level.

"Who will win? How much influence does the president actually have? Who will be the main players in the policy process? What would the economic, political and social policy mix of the two parties mean for U.S. and global economic growth, for international policy, world trade and global security? There is great uncertainty, and uncertainty translates into risk premia both in economies and financial markets."