Stocks in Asia traded higher Tuesday, and most markets (except China's CSI 300) are now up for the week as investors in Asia can digest an apparent US debt limit deal, removing a massive global tail risk for now.
If one thing still unites both Republicans and Democrats and even hardliners, it is a desire to avoid giving rivals like China a leg-up advantage.
European equities are little changed this morning and flat for the week -- illustrating how a US debt limit deal appears to have been largely anticipated by most risk assets.
Across asset classes, 10-year US Treasury yields are reacting more definitively to the debt limit news -- down 8bp to 3.73% -- with the move lower, reflecting, perhaps, the negative growth impulse that may accompany the spending cut that the debt limit resolution entails. Hence Fed sentiment is centring around the June pause rather than a rate hike camp today.
We don't necessarily agree with the move, as a debt deal should allow the market to continue pricing a firmer path for Fed policy and the Dollar for the weeks ahead. Let's see if New York supports this view.
SPI Asset Management provides forex, commodities, and global indices analysis, in a timely and accurate fashion on major economic trends, technical analysis, and worldwide events that impact different asset classes and investors.
Our publications are for general information purposes only. It is not investment advice or a solicitation to buy or sell securities.
Opinions are the authors — not necessarily SPI Asset Management its officers or directors. Leveraged trading is high risk and not suitable for all. Losses can exceed investments.
Recommended Content
Editors’ Picks
AUD/USD holds recovery gains near 0.6400 after hot Australian inflation data

AUD/USD is keeping its recovery mode intact near 0.6400 after Australia’s monthly Consumer Price Index (CPI) rose 5.2% in the year to August 2023, as expected. Investors assess the inflation data ahead of next week's RBA policy meeting.
EUR/USD hits fresh six-month lows near 1.0550

EUR/USD is holding lower ground near 1.0550, sitting at fresh six-month lows in the Asian session on Wednesday. The US Dollar remains firm, benefiting from risk aversion, maintaining the downward pressure on the pair.
Gold remains on the defensive near $1,900 amid the USD demand

Gold price attracts some sellers around $1,902 during the early European session on Wednesday. Precious Metal faces some selling pressure due to a rally of the US Dollar (USD) ahead of the highly-anticipated inflation data on Friday.
Ripple and Coinbase lead the big fight as US crypto firms advocate for regulatory overhaul

Ripple Labs is standing shoulder-to-shoulder with US-based cryptocurrency exchange Coinbase as crypto firms in the US push for a regulatory overhaul in the country. It comes amid growing concerns that stringent and unclear regulatory structures in the US continue to drive business away from the country.
U.S. government shutdowns & U.S. Dollar implications

A potential U.S. government shutdown that could start October 1st looms, the chances of which are more or less seen as a coin flip at this point. Should a shutdown transpire, there could be a negative impact of the U.S dollar, albeit one that is likely to be modest and short-lived.