The US earthquake and tsunami is probably over

As you all probably know, the US debt ceiling had been the primary focus of attention since the PIIGS passed over the baton of global focus.

“A deal had been reached to cut US$ 2.4T over the next decade”, President Barack Obama announced.

There are three hurdles to overcome –

·         Vote by the Senate

·         Vote by the House of Representatives and hence to the President’s desk

·         If the ‘deal’ pleases/meets the credit rating agencies requirements.

Otherwise, this would create another series of aftershocks. Prior to the deal being reached, global markets were jittery over the last week or two. News of the deal had sent Asia Pacific indices higher. This would probably overflow to Europe and the US.

But, what is actually the plan details and how would the experts interpret the details? As usual, the market rally on news/hopes and reverses when the details are intepreted otherwise.

Cometh nightfall, the markets will be focus on the bill being passed to the Senate and the House of Representatives. At the backroom, credit rating agencies will be accessing the new deal.

There’s something to note over last week. Yes, you’ve guess it right. The US economic data (GDP figures) were really pathetic. Q2 GDP figures came in lower than expected. To add injury, Q1 GDP figures were revised much lower. Could I say fortunately or unfortunately, the debt ceiling drama was in focus?

As the August 2^nd deadline is in focus, it would remain the primary focus until Friday, the next key indicator, US Nonfarm payroll and the unemployment rate. Aftwhich no (bad) news is good news!