Democrats feel the art of the deal

by | Sep 7, 2017

European markets opened a little higher today, partly prompted by an act of good will between the Democrats and Republicans under Trump stateside which improved investor sentiment. The dealmaker is said to have signed off on an agreement to raise the U.S. governments debt ceiling in the short term, thus increasing the amount they can borrow to avoid a default and a government shutdown. 

The deal has been met with criticism by Republicans, who believe the offer to Trump was accepted too rapidly by the President and gives the Democrats too much leverage in Congress. The other interesting fact was that the deal was made between Trump and two Democrats he usually prefers to antagonize, rather than help – Chuck Schumer and House Minority Leader Nancy Pelosi (pictured). The agreement could therefore be taken as a step forward in party relations, which have been under massive strain ever since Trump took office. This in turn could improve the Presidents chances of getting tax reforms through Congress after the failures on repealing and replacing Obamacare, which reduced market confidence in his abilities to enact his pro-growth agenda. 

Elsewhere the ECB meets later today to announce policy changes going forward for the Eurozone economy. The central bank is in the spotlight after Deutschebank CEO John Cryan and German finance figurehead Wolfgang Schäuble both said publicly that the ECB needs to stop pumping so many billions of Euros into the European economy. They also think it’s time to raise interest rates to normal levels again, with more signs of health in the economy appearing every month. The value of the Euro will likely move even higher or lower depending on the words of Mario Draghi, ECB Chief, later today.

In Asia today we saw mixed results for equity indices, but interestingly the Korean KOPSI index rose faster than other major markets across the region, despite the ongoing fear over war with North Korea.

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