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MAMUI AKWASI
Sep 28, 2021 5:10PM ET
please sell some now you are great
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Debt Ceiling Fight Is Center Stage, Not Data
www.investing.com/analysis/debt-ceiling-fight-is-center-stage-not-data-200603262
Debt Ceiling Fight Is Center Stage, Not Data
By Kathy Lien | Sep 28, 2021 01:54AM ET Investors kicked off the week with renewed demand for US assets. The Dow Jones Industrial Average rallied for the fifth straight trading day while the US dollar strengthened versus the euro, Japanese yen and Swiss franc. Ten year Treasury yields also hit 1.5% intraday, which kept the dollar bid throughout the NY session. After last week’s busy economic calendar, data will take a backseat to central bank speak and the debt ceiling fight on Capitol Hill.
For now, market price action reflects little concern as investors grow numb to government shutdown threats. Votes on the infrastructure spending bill and a stop gap measure to prevent government funding from expiring on Sept. 30 could still derail the rally. We expect investors to take their cue from developments in Washington and comments from US policymakers this week. Fed Chairman Powell, ECB President Lagarde and Treasury Secretary Yellen are scheduled to speak along with a number of Fed Presidents.
Comments from central bankers are unlikely to alter the market’s expectations for US or Eurozone monetary policy. The Fed made it very clear that they are ready to begin tapering asset purchases and this outlook should sustain demand for US dollars. The European Central Bank reduced PEPP purchases but even with the decrease, they will lag behind the Fed. Monetary policy divergence and disappointment over the German election explains why euro underperformed the dollar today.
All other high beta currencies traded higher against the greenback with the Australian dollar and British pound leading the gains. The Australian government laid out a plan for COVID-19 “Freedom Day.” This third stage of reopening will begin as early as Oct. 11 for cities like Sydney when the vaccination hits 70%. Neighboring state Victoria has not yet provided a reopening date, but the move by New South Wales is a bright light shining at the end of the tunnel. If all goes as planned, Australia, which is poised to contract in Q3 looks forward to a strong robust fourth quarter recovery. Unfortunately the retail sales report reflects the economic pain of August lockdowns.
Sterling seemed unfazed by cautious comments from Bank of England Governor Bailey. He reiterated the central bank’s view that inflation is transitory and warned that the rate of recovery is slowing. The New Zealand and Canadian dollars extended their gains with loonie supported by oil prices, which hit a 3 year high. The Japanese yen and Swiss franc traded lower as risk appetite improved.
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Debt Ceiling Fight Is Center Stage, Not Data
Comments (11)
Gábor Kardos
Sep 28, 2021 5:07PM ET
Kathy.. in 1H you were saying this is going to 1.25 and above due to money printing, etc. im getting confused
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Meek Mr
Sep 28, 2021 6:50AM ET
Pls are we to sell EUR and USD now...+
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asad khan
Sep 28, 2021 4:19AM ET
thank you for market stock not expirecn you have a great
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Ioannis Lazaridis
Sep 28, 2021 4:17AM ET
Kathy , your macroeconomic skills are shining in this article. My respects for what I consider as one of the best article of the last three months. Thank you.
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Yusuf Abubakar
Sep 28, 2021 4:17AM ET
thanks
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Frank Borroto
Sep 28, 2021 3:32AM ET
Thanks so mich for your knowledge and information :)
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Yusuf Abubakar
Sep 28, 2021 3:32AM ET
thank you
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Worlaedem Ayer
Sep 28, 2021 2:38AM ET
good
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James Pattison
Sep 28, 2021 2:18AM ET
Time to juice the market some more… inflation worries to the wind… what stock is pelosi buying? Follow the democrat money… enrich themselves while they fleece or children and grandchildrens futures
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irene brown
Sep 28, 2021 2:15AM ET
good morning
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Olanshile Ibrahim
Sep 28, 2021 2:05AM ET
good morning
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