14 Oct 2013
European open: Still no concrete deal to extend debt ceiling
FXstreet.com (London) - Despite some breakthroughs made in negotiations between Republicans and Democrats last week, the two parties have yet to thrash out a concrete deal that would allow for a temporary extension to the debt ceiling. Senior Republicans last week proposed a six-week extension of the ceiling in exchange for a wide-ranging discussion about spending cuts. Though nothing has been put to the floor, the fact that Republicans have shown that they are ready to capitulate should help market concerns that the US would cut things too fine before the October 17 hard ceiling, after which it would be unable to service it's debts. However, currency markets are not yet showing much dollar enthusiasm.
In the US, Columbus Day means that bond markets are closed while stock markets remain open.
The shutdown continues to put a freeze on federal data releases.
Over the weekend, Chinese data disappointed, with Trade balance numbers coming in lower than expected at USD15.21bn, with exports unexpectedly falling 0.3 percent year-on-year versus a market expectation of +5.5 percent. Imports rose 0.4 percent year-on-year, weighed by weak global demand, though numbers are skewed by fake invoices in 2012.
China year-on-year CPI printed at 3.1 percent on strong domestic data while the PPI fell 1.3 percent. This is seen as supporting the view that the Chinese trade balance fall is weighed by weakening export demand rather that a rising cost of imports.
In New Zealand, record Reinz House Sales numbers saw a year-on-year rise of 19.0 percent in September compared to 8.5 percent last month. Concerns over an overheated housing market could make a further rate hike from the Reserve Bank of New Zealand increasingly likely, potentially at the end of first quarter 2014. NZD/USD is up 0.3 percent to USD0.8344.
In the US, Columbus Day means that bond markets are closed while stock markets remain open.
The shutdown continues to put a freeze on federal data releases.
Over the weekend, Chinese data disappointed, with Trade balance numbers coming in lower than expected at USD15.21bn, with exports unexpectedly falling 0.3 percent year-on-year versus a market expectation of +5.5 percent. Imports rose 0.4 percent year-on-year, weighed by weak global demand, though numbers are skewed by fake invoices in 2012.
China year-on-year CPI printed at 3.1 percent on strong domestic data while the PPI fell 1.3 percent. This is seen as supporting the view that the Chinese trade balance fall is weighed by weakening export demand rather that a rising cost of imports.
In New Zealand, record Reinz House Sales numbers saw a year-on-year rise of 19.0 percent in September compared to 8.5 percent last month. Concerns over an overheated housing market could make a further rate hike from the Reserve Bank of New Zealand increasingly likely, potentially at the end of first quarter 2014. NZD/USD is up 0.3 percent to USD0.8344.