9.02: US government shuts down, markets fall.
The end of the week is not as easy as the traders would hope: markets are unstable, dollar gains weight but other currencies are trying to push back and the US government went into shutdown.
This week has both started and ended with the panic at the equity markets which was followed by the massive selloffs in both cases.
Today the hit was so hard that the European stocks are going for the five-month low and American and Asian markets are dipping as much as 10 percent losses.
The selloffs are going on in the light of fear of the inflation but the market spectators ask traders to not be prone to panicking as the markets can heal themselves easily and the current situation is probably caused by the bid cash infusion.
In the meantime the greenback has lost positions against Euro and Pound but gained weight against yes, while yuan is lower.
The US officials failed to vote for the new budget and starting midnight in Washington all the governmental offices are to close their doors and to stop their work.
this is the second shutdown for the government this year. The first one took place January 20-23, after the exact same problem. Back than the problem was resolved by voting for the temporary budget, which expired already.
Earlier both the democrats and the republicans agreed to the budget which called for more expenses, but one of the senators from conservative party didn’t agree with the spending policy so he took his time and caused the shutdown.
The discussions are to renew on Monday.
The White House official who held a press conference earlier in Washington said that the draft of Trump’s budget will be unveiled to the US Government on Monday and that it indeed contains a proposal for a wall between Mexico and USA.
This year US Customs and Borders Protection agency has asked for $14 billion and on top of the President’s project will add $3 more billion. According to the official the money will be spent for the land purchasing in South Texas and 96 km long steel bollard fencing.
The rest of the border is proposed to be closed in 2019.
MSCI Asia Pacific Index is no longer recovering but once again falling - -1.9 percent in the last 24 hours.
Stoxx Europe 600 Index slipped by 0.4 percent.
S&P 500 Futures rose by 0.8 percent.
The greenback seems to not have changes its behavior in the last 24 hours. Yen is still under some pressure from him – 0.4 percent decline with the exchange rate 109.14 yen per dollar.
Euro continues the gain - +0.3% up to the price of $1.2278.
Pound also grew. 0.4 percent gain brings it to the price of $1.3965.
Silver is $16.35 per ounce with 0.4 percent loss and gold is $1.316.02.
WTI gets closer and closer to the $60 per barrel with the current price of 60.53 USD per barrel – lowest point in five weeks.
- by Mark Densel