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30 Sep 2013
Flash: USD and a Government shut down – TD Securities
FXstreet.com (London) - Research teams at TD securities explained that the odds of a government shutdown have increased significantly.
Key Quotes:
“The Republican House ignored Senate warnings to pass a clean funding bill and sent back a short-term spending bill that included two anti-Obamacare provisions that are a non-starter”.
“The ball is now in the Senate’s court, but that body will not reconvene until 2PM EST. When they do, the house funding measure will be struck down; so the government is left with no funding bill or workable continuing resolution without which the government will shut down after midnight”.
“Passing a funding bill to keep the government operating was expected to be the easier obstacle to pass in a month that also features a more contentious fight on the debt limit. A short-term government shutdown this week could create a popular backlash against Congress which in turn could conceivably facilitate a smoother resolution of the debt limit showdown”.
“But then again, it might not, and it is this uncertainty and lack of political governance that will undermine risk appetite today. If the government does shut down—and odds must be viewed as better than even at this point—then the September jobs report due out this Friday may also be delayed”.
Key Quotes:
“The Republican House ignored Senate warnings to pass a clean funding bill and sent back a short-term spending bill that included two anti-Obamacare provisions that are a non-starter”.
“The ball is now in the Senate’s court, but that body will not reconvene until 2PM EST. When they do, the house funding measure will be struck down; so the government is left with no funding bill or workable continuing resolution without which the government will shut down after midnight”.
“Passing a funding bill to keep the government operating was expected to be the easier obstacle to pass in a month that also features a more contentious fight on the debt limit. A short-term government shutdown this week could create a popular backlash against Congress which in turn could conceivably facilitate a smoother resolution of the debt limit showdown”.
“But then again, it might not, and it is this uncertainty and lack of political governance that will undermine risk appetite today. If the government does shut down—and odds must be viewed as better than even at this point—then the September jobs report due out this Friday may also be delayed”.