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13 Sep 2013
Flash: Emergence of US debt-ceiling debate could derail market rally – Deutsche Bank
FXstreet.com (Lisbon) - In terms of markets yesterday saw the seven-day US equity rally pause for breath, notes Macro Strategy Analysts J. Reid and C. Tan at Deutsche Bank.
Key quotes
“Syrian and US debt ceiling-related headlines probably weighed on markets, but it’s fair to say that there was a general sense of weariness after what has been a strong start to September.”
“There was some hint of Syrian-related caution after Assad said that his government will sign the UN Chemical Weapons treaty but required conditions that include the US ceasing its military threats and that Israel should also sign the same treaty. On the US budget debate, US Democrat and Republic negotiations appear far from reaching a conclusion.”
In addition, “Republicans are considering using the impending government shutdown as leverage to delay Obamacare health laws, a move which was criticized by Democrat leaders. 10yr UST yields closed unchanged yesterday at 2.91% but there was a bit of intraday volatility in Treasuries after a much lower than expected US jobless claims number (292k vs 330 expected). The claims data saw 10yr UST yields spike up in the immediate aftermath. But this was retraced minutes later after the US Department of Labor said that two states were missing in the tally due to a technical glitch.”
Key quotes
“Syrian and US debt ceiling-related headlines probably weighed on markets, but it’s fair to say that there was a general sense of weariness after what has been a strong start to September.”
“There was some hint of Syrian-related caution after Assad said that his government will sign the UN Chemical Weapons treaty but required conditions that include the US ceasing its military threats and that Israel should also sign the same treaty. On the US budget debate, US Democrat and Republic negotiations appear far from reaching a conclusion.”
In addition, “Republicans are considering using the impending government shutdown as leverage to delay Obamacare health laws, a move which was criticized by Democrat leaders. 10yr UST yields closed unchanged yesterday at 2.91% but there was a bit of intraday volatility in Treasuries after a much lower than expected US jobless claims number (292k vs 330 expected). The claims data saw 10yr UST yields spike up in the immediate aftermath. But this was retraced minutes later after the US Department of Labor said that two states were missing in the tally due to a technical glitch.”