Traders have shown little action to news releases that negotiations between US lawmakers are close to an agreement. On Monday, news hit the wires that a solution had been reached as President Obama delayed a meeting with lawmakers to allow them to finish their negotiations. Rumors hit the markets say that a possible vote could take place as soon as Monday night. Late on Monday evening a bi-partisan press conference indicated that lawmakers were putting final touches on a proposal to open the government and raise the debt ceiling. A vote is now expected early in the US session. Markets are reacting in a positive manner in Asia but traders remain cautious. The Dow climbed yesterday after the news release to add 64 points reversing a loss of much as 101 points in morning trading. The Dow had climbed 461 points over the previous three sessions amid signs that a deal to raise the nation’s borrowing limit and end the government shutdown was in sight. The S&P 500 rose 7 points, or 0.4%, to 1710, while the Nasdaq was up 23 points, or 0.6%, to 3814. European share markets were uncertain as lawmakers in the US did not make any decisions and there was little updated news as the closed for the day. European leading indices ended mixed with the U.K.’s FTSE-100 putting on 0.3% to 6507.65. France’s CAC 40 climbed 0.1% to 4222.96, while Germany’s DAX 30 ended in the red at 8723.81.
On Tuesday morning Asian shares rose to their highest in nearly five months on expectations of an imminent deal to reopen the US government and avert a possible debt default, though the squabbling in Washington kept markets on edge ahead of Thursday’s deadline, reported Reuters. Hong Kong’s Hang Seng rose 0.70 percent or 161.41 points at 23,379.73 and the Nikkei gained 0.37 percent or 53.60 points at 14,458.34. South Korea’s Seoul Composite added 0.90 percent or 18.14 points at 2,038.41 and Taiwan’s Taiwan Weighted was up 0.80 percent or 66.46 points at 8,340.42. China’s Shanghai Composite was flat at 2,237.26. Singapore’s Straits Times shut today. Global markets are poised to soar the minute a deal is approved in the US. Traders will breathe a sigh of relief, just knowing that a default will not happen but more that the government will begin to release data. The data void has weighed heavily on traders over the past two week.
There has been little market wide data to help traders with US data still unavailable. Earlier traders reviewed Chinese data and Eurozone production numbers. Chinese data over the weekend showed a surprise decline in exports in September, signaling the global economy is still struggling to recover. Additionally, Chinese consumer prices rose faster than expected in September, although remaining within the government’s target range. In Europe, data showed industrial production rebounded in August in the euro zone, rising 1% month-on-month. The Wall Street Journal reported that The annual rate of inflation across the world’s largest economies fell in August, a development that if sustained would make many central banks more comfortable with keeping their monetary policies simulative for an extended period. For the first time, a group of international institutions Monday published a measure of inflation for the members of the Group of 20, which comprise the 19 largest national economies, plus the European Union. According to that measure, the annual rate of inflation across the G-20 stood at 3.0% in August, down from 3.2% in July.
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