Risk of default situation is still relevant
Risk remains en vogue with rumors of a deal from the US to avert a default situation before the deadline on October 17th. With no concrete news markets have been spurred by the headlines that senate leaders have made “tremendous progress” to reopen the government till mid January and extend the debt ceiling till mid February.
President Obama postponed yest’s bipartisan meeting to provide Senate leaders more time to forge a solution, with a full Senate Rep caucus meeting to now be held Tue 15GMT. In anticipation of the deal, leveraged funds have been busy selling the Yen, whilst Aussie is being sought across the board. Besides the US political drama, UK CPI and Germany’s ZEW survey could provide a sidelined prop to European currencies if they surprise on the upside.
There is also an ecofin meeting today so expect plenty of comments, whilst US features Octobers empire state manufacturing index.