New to Succinct?
Debt Ceiling Deal Reached
Latest: on Saturday evening, Biden and McCarthy agreed, in principle, to unlock the debt ceiling standoff. The agreement will increase the $31.4tn debt ceiling for two years and include limits on government spending until late 2024. The legislation still needs to be approved by both chambers of Congress next week to pass it into law.
“The agreement represents a compromise, which means not everyone gets what they want. That’s the responsibility of governing,” President Biden said.
“I believe this is an agreement in principle that is worthy of the American people,” Republican House Speaker McCarthy said.
“It has historic reductions in spending, consequential reforms that will lift people out of poverty into the workforce, rein in government overreach,” he added.
Friday had already been a positive day in markets following remarks that suggested a deal was on the way. Kevin McCarthy told reporters that his White House counterparts were being “very professional, very knowledgeable.”
● The main drivers of last week’s highly volatile trading sessions, besides the default risk, were a rise in US PCE inflation as well as a surprise increase in UK’s core CPI inflation, and the fact that Germany officially fell into recession. The consequences were a stronger dollar and higher interest rates in particular those in UK markets. Weak manufacturing data also weighed on sentiment and most commodity markets sold off. In equity markets, a strong rally in semiconductors stocks helped Nasdaq indexes outperform their value counterparts with a ~3% jump.
● Turkey holds the presidential runoff election today with an advantage for Erdoğan after Sinan Ogan (5% of votes) endorsed the incumbent president.