Deal close as Obama meets with leaders of Congress
President Obama is due to meet leaders of Congress today regarding the government shutdown.
Wire reports at the time of writing suggested a deal was very close, with arrangements being made to extend the authority of the US to borrow out to mid-February.
The market was lightly traded overnight following a holiday in Japan and the Columbus Day holiday in the US.
Equity markets were open and the Dow posted a rise of 0.4% despite a lack of resolution to its debt ceiling issues.
The market is behaving as if a solution will be found and that minimal, if any, damage will occur to the US or global economies. We hope they are correct.
In Europe the FTSE lifted 0.3% and the Dax was flat after reaching a record high on Friday.
The US 10 year bond futures market was open despite the US public holiday.
Action there implied a 4 basis point rise in US long bonds. The rise came as news emerged that President Obama would meet with leaders of Congress later today.
A meeting planned for 3pm US time was postponed to give leaders more time to put together a resolution they believe will be acceptable to both political parties.
After weakening early in the overnight session, the USD picked up against the yen and euro as news emerged of a possible breakthrough in the US debt ceiling talks.
The AUD gained against the USD early in the session, breaching US 95 cents at one point, before slipping back into the US 94 cent range.
The closure, through lack of funds, of the US Energy Information Administration, means reliable data on oil supply, inventories and purchases will be limited, making trading in oil more difficult.
Deals will be made using less information. Oil prices edged higher overnight as did gold and copper. If the US (and the rest of the world) can avoid US inspired financial turmoil, demand for commodities should firm.
Housing finance was largely in line with our expectations, with the number of new housing loans for owner occupiers falling 3.9% in August, following seven consecutive months of gains in housing finance.
Rather than representing a reversal in the trend, the decline in August home loans suggests uncertainty surrounding the election in early September.
For the year to August, the number of new housing loans to owner occupier increased 9.5%.
The value of new owner occupier housing loans fell 1.9% in August, while the value of investor housing loans was unchanged in August.
For the year to August the value of investor housing loans are up 25.4%.
Today in Australia we see the minutes of the October RBA board meeting.
These will hopefully assist in determining whether the RBA has moved away from its easing bias and moved to a more neutral stance.
China's CPI inflation was higher than expected, rising 3.1% in the year to September, following a 2.6% increase in the year to August.
Food price inflation rose 6.1% in the year to September, the highest rate since May 2012.
Producer price inflation increased to -1.3% in the year to September, from -1.6% in the year to August.
Eurozone industrial production almost recovered its July loss of 1% (revised) with a 1% gain in August.
The bounce was led by Germany on 1.8% (reversing July's 1.6% fall); although back to back falls in German orders in July-August suggest that further gains in production may not be sustainable.
No data due to the Columbus Day holiday.
President Obama is due to meet leaders of Congress today. Wire reports at the time of writing suggested a deal was very close with arrangements being made to extend the authority of the US to borrow out to mid-February.