Markets put their faith in an end to the shutdown

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The US stockmarket gained on Friday night on hopes US politicians would reach an agreement on the fiscal impasse.

The Republican proposal to extend the debt ceiling for six weeks and reopen the government, in return for Budget talks, continued to support equity markets on Friday night. 

The Dow rose 0.7%, the S&P 500 gained 0.6% and the Nasdaq was up 0.8% for the session.

The rejection of the Republican proposal by President Obama over the weekend, however, is likely to weigh on sentiment today.

Over the weekend US politicians expressed optimism that a debt default could be avoided, although a solution is yet to be reached.

World Bank President Jim Yong Kim yesterday urged US policy makers to reach an agreement, saying we are "five days away from a very dangerous moment."


US bond prices eased (yields rose slightly) on concerns about the US debt ceiling, despite the Republican proposal.

Foreign Exchange:

The Aussie dollar opened weaker this morning and is now trading at 0.9435 US dollars, down from 0.9471 US dollars at the close on Saturday morning, with sentiment deteriorating on news US President Obama rejected the Republican proposal and the surprising decline in China's exports in data released on the weekend.

The Japanese Yen opened stronger this morning with the JPY/USD trading at 98.32 currently on diminished risk appetites given the weekend's developments on the US fiscal negotiations.


Commodity prices softened on Friday night.

The gold price fell on hopes of an agreement between US lawmakers, although President Obama's rejection of the proposal over the weekend should provide some support for gold.


The ABS provided more detail on building activity in the June quarter.

While the value of activity on new residential buildings fell 0.2% in the quarter, activity in the additions and alterations sector were strong rising 4.0%.

Over the year to June 2013 the value of work undertaken on new homes rose 5.9% while the value of alterations and additions fell 2.5%.

Today we see housing finance figures for August.


China's trade surplus narrowed to US$15.2bn in September, from US$28.5bn in August.

Exports slipped 0.3% in the year to September, highlighting lacklustre global demand, although this follows a 7.2% jump in exports in the year to August.

On a more positive note, China's imports rose 7.4% in the year to September, an improvement from the 7.0% annual rate in August.

United States:

Consumer sentiment fell 2.3 points to a reading of 75.2 points in October, according to the University of Michigan.

The decline was concentrated in the expectations component, while the current conditions index was little changed.

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