January 22, 2018, by Lorcan Roche Kelly
Bipartisan efforts to broker a deal to end the government shutdown failed to find agreement over the weekend, meaning disruptions will expand this morning for Americans as federal agencies begin closing at the start of their normal workweek. The Washington blame game also goes into full swing, with Senators including South Carolina Republican Lindsey Graham holding up President Donald Trump’s staff for complicating talks with their hard line on immigration. Despite the drama, the shutdown continues to be seen as little more than a blip for markets and the U.S. economy, for now.
OPEC and Russia reaffirmed their intention to maintain oil production cuts for the rest of this year, while signaling their readiness to continue to cooperate into 2019. Russian Energy Minister Alexander Novak said in a Bloomberg Television interview that the global oil market still isn’t fully rebalanced. A barrel of West Texas Intermediate for February delivery was trading at $63.32 at 5:40 a.m. Eastern Time.
German Chancellor Angela Merkel’s chances of leading the country for a fourth term received a boost over the weekend when her prospective coalition partner, the Social Democratic Party, voted to formally enter negotiations on forming a government. Talks on a so-called grand coalition could begin as soon as tomorrow. The euro climbed on the increased chances of no new election in Europe’s largest economy, trading at $1.2261 by 5:40 a.m.
Overnight, the MSCI Asia Pacific Index gained 0.2 percent, while Japan’s Topix index closed 0.1 percent higher as the yen slipped towards the end of the session. In Europe, the Stoxx 600 Index was unchanged at 5:40 a.m., with UBS Group AG shares dropping after the bank reported earnings that missed estimates. S&P 500 futures were 0.2 percent lower, the 10-year Treasury yield was at 2.650 percent and gold was slightly higher.
The annual World Economic Forum shindig in Davos kicks off today, with the great and the good from the world of business, politics and entertainment descending on the Swiss town to discuss what is wrong with the world and how they can fix it. The attendance of Donald Trump at the event may fall victim to the government shutdown, should the impasse extend through the week.