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8 Oct 2013
European open: Markets maintain poker face to debt ceiling, but look for tells in AUD, NZD, CAD, NOK and SEK.
FXstreet.com (London) - As the US government shutdown continues to weigh on markets, stock markets fell yesterday. The S&P fell 0.85 percent while the Ftse lost 0.85 percent.
There was a brief burst of optimism yesterday that the House was ready to table a “clean” spending bill, but those rumours came to nothing.
The Asian markets bucked the trend, the Nikkei rose 0.34 percent and the Hang Seng gained 1.01 percent.
Despite approaching the hard ceiling for US debt, treasuries are yet to show significant concern. Congress has until 17 October to pass a continuing resolution that would allow an extension of the government debt ceiling. After this point, the US would be unable to service its debt obligations.
Rather than compromise, there has been a hardening of attitudes on both sides of the aisle in their stance towards the debt ceiling negotiations. Republican House Speaker John Boehner has said that a spending bill will not be passed to the Senate without provisions for budget cuts. Something Senate Democrats and President Obama have so far flat out rejected.
Yesterday saw a creeping of risk aversion in AUD/JPY and USD/CHF pairs, as well as in AUD, NZD, CAD, NOK and SEK.
JPY has seen the strongest buying on US uncertainty, but the dollar regained much of yesterday’s lost ground through the Asian session, gaining 0.54 percent to JPY97.1350.
There was a brief burst of optimism yesterday that the House was ready to table a “clean” spending bill, but those rumours came to nothing.
The Asian markets bucked the trend, the Nikkei rose 0.34 percent and the Hang Seng gained 1.01 percent.
Despite approaching the hard ceiling for US debt, treasuries are yet to show significant concern. Congress has until 17 October to pass a continuing resolution that would allow an extension of the government debt ceiling. After this point, the US would be unable to service its debt obligations.
Rather than compromise, there has been a hardening of attitudes on both sides of the aisle in their stance towards the debt ceiling negotiations. Republican House Speaker John Boehner has said that a spending bill will not be passed to the Senate without provisions for budget cuts. Something Senate Democrats and President Obama have so far flat out rejected.
Yesterday saw a creeping of risk aversion in AUD/JPY and USD/CHF pairs, as well as in AUD, NZD, CAD, NOK and SEK.
JPY has seen the strongest buying on US uncertainty, but the dollar regained much of yesterday’s lost ground through the Asian session, gaining 0.54 percent to JPY97.1350.