Morning Commentary: “A House Divided Against Itself, Cannot Stand” --Abraham Lincoln, 1858
A daily summary and commentary of events and factors that affect the global markets, with a particular emphasis on the foreign exchange markets.
“A House Divided Against Itself, Cannot Stand” --Abraham Lincoln, 1858
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Alan Rose Foreign Exchange Senior Trader
Markets are slightly more optimistic and upbeat this morning with global equities moving higher along with interest rates and commodity prices. The U.S. dollar (DXY) is slightly weaker after eight consecutive days of strength with commodity-linked currencies outperforming and safe haven currencies weakening. Part of the source for today’s more upbeat attitude is related to the fact that senior Congressional lawmakers late last night reached an “agreement in principle” to fund border security and avoid another government shutdown this weekend.
Today is Abraham Lincoln’s birthday. To honor our 16th President, our title comes from when he was running for Senate in Illinois in 1858. He gave a passionate speech and spoke of the dangers of a slavery-based disunion of the country creating a permanently half slave and half free country. While we are nowhere near those types of tensions in the country right now, we are a very polarized and bifurcated country with states that are very blue and very red with little to celebrate in the way of Congressional compromises.
This compromise on avoiding a government shutdown is just the first step as the compromise needs to be passed by the House and Senate by Friday, and more importantly, President Trump will need to sign it. So far, there has been no indication from the White House that President Trump will sign it. If Congress acts to pass this legislation and President Trump does not sign it, we will have another government shutdown beginning this weekend that could once again roil the markets. For now, the compromise is a good sign that Republicans and Democrats can come to an agreement about what is in the best interest of the country. No victory is too small!
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