US debt ceiling damages risk
City Index September 25, 2013 2:33 PM
<p>The risk trade is trading with a slight soft bias with the key themes being the never ending taper debate, with the price action showing […]</p>
The risk trade is trading with a slight soft bias with the key themes being the never ending taper debate, with the price action showing short-term movements on US data releases as the market has focused its attention on the imminent need to raise the US debt ceiling.
It seems nothing was learnt from the fallout out of 2011, which resulted in the S&P downgrading the US from a AAA status. The time frame is getting tight for an agreement with the Federal Government not funded beyond the 30th of September as the new financial year starts on the 1st of October. Cash balance projections show the US treasury will run out of cash by the 23rd of October. The stalemate all revolves around the Obama health care bill, with neither side looking to negotiate at this point.
In other news, the NZD traded back to pre FOMC levels following a larger than expected trade deficit in New Zealand. The focus is also turning to the month re-balancing, with most anticipating USD selling in G10 space bar the JPY.
Another quiet day from a data perspective, with only US durable goods and US new home sales due for release this afternoon.
Supports 1.3450-1.3410-1.3380 | Resistance 1.3525-1.3580-1.3620
Supports 98.40-97.80-97.40 | Resistance 99.20-99.80-100.00
Supports 1.5950-1.5925-1.5875 | Resistance 1.6020-1.6075-1.6160
GAIN Capital UK Limited (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.
No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.