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7 Oct 2013
Political landscape in the U.S. getting uglier by the day...
FXstreet.com (Barcelona) - The notion that the current U.S. political stalemate will not be easily resolved, thus the duration of the US government shutdown may be prolonged for a more extensive-than-expected period is a thought starting to cross a wider sector of market participants' minds, especially if one reads the weekend headlines, with the Financial Times reporting House of Representatives Speaker John Boehner - Republican - as saying it was "time for us to stand and fight."
In the context of a shutdown that will enter its second week at the end of trading Tuesday, and with no apparent willingness by neither party to find even a 'quick fix' by agreeing to fund the government if only temporarily until wider consensus is reached, a sense of increased fear is likely to engulf markets this week, as the debt ceiling headline - Oct 17 - approaches.
Few have factored in the debt ceiling will not be raised as the consequences for America and the mere prospects of a default should by itself cause enough panic to politicians to leave behind its party's political interests to instead do 'what makes sense.'
Speaking of his Republicans colleagues, Boehner said: "You’ve never seen a more dedicated group of people who are thoroughly concerned about the future of our country. The nation’s credit is at risk because of the administration’s refusal to sit down and have a conversation." While Obama insists he will not sit down to negotiate the healthcare bill. One can clearly see the hard-line stance from both main political parties in the U.S., thus the anticipation of an arduous road ahead.
According to Valeria Bednarik, Chief Analyst at FXstreet.com: "The tensions among traders favor the most yen gains on its safe haven status. The inaction of BOJ this last Friday added to the case, along with US stocks that fell for third week in a row. Overall, the picture remains unchanged from past week, at least from the fundamental point of view, as the greenback’s weakness prevails, not only because of the government shut down, but also for the lack of growth show by the economy."
In the context of a shutdown that will enter its second week at the end of trading Tuesday, and with no apparent willingness by neither party to find even a 'quick fix' by agreeing to fund the government if only temporarily until wider consensus is reached, a sense of increased fear is likely to engulf markets this week, as the debt ceiling headline - Oct 17 - approaches.
Few have factored in the debt ceiling will not be raised as the consequences for America and the mere prospects of a default should by itself cause enough panic to politicians to leave behind its party's political interests to instead do 'what makes sense.'
Speaking of his Republicans colleagues, Boehner said: "You’ve never seen a more dedicated group of people who are thoroughly concerned about the future of our country. The nation’s credit is at risk because of the administration’s refusal to sit down and have a conversation." While Obama insists he will not sit down to negotiate the healthcare bill. One can clearly see the hard-line stance from both main political parties in the U.S., thus the anticipation of an arduous road ahead.
According to Valeria Bednarik, Chief Analyst at FXstreet.com: "The tensions among traders favor the most yen gains on its safe haven status. The inaction of BOJ this last Friday added to the case, along with US stocks that fell for third week in a row. Overall, the picture remains unchanged from past week, at least from the fundamental point of view, as the greenback’s weakness prevails, not only because of the government shut down, but also for the lack of growth show by the economy."