US Government Shutdown Averted: A Comprehensive Overview.US Government Shutdown Averted: A Comprehensive Overview
Background
The US government narrowly avoided a shutdown after a last-minute spending deal was passed just hours before the deadline. This agreement came after intense negotiations and a brief period of uncertainty that had federal employees and the public on edge.
Key Events Leading to the Near Shutdown
Initial Spending Deal: House Speaker Mike Johnson negotiated a bipartisan spending deal that included disaster relief funding and other provisions. However, this deal faced opposition from President-elect Donald Trump and tech billionaire Elon Musk.
Trump's Opposition: Trump demanded that the deal include provisions to raise the debt ceiling, leading to the collapse of the initial agreement.
Revised Deal: After intense negotiations, a revised spending bill was passed with bipartisan support, excluding the debt ceiling provisions. This bill funds the government through March 2025.
Impact of the Near Shutdown
Federal Employees: Thousands of federal employees faced uncertainty about their pay. Essential services were maintained, but non-essential functions were at risk of being halted.
Economic Effects: Analysts projected that a prolonged shutdown could reduce GDP growth by 0.15 percentage points for each week of closure. However, the impact is expected to be temporary, with a potential boost in GDP growth once the government reopens.
Market Reactions: The stock market experienced volatility during the near shutdown period, with investors closely monitoring developments in Washington. The resolution of the shutdown provided some relief to market participants.
Future Outlook
Debt Ceiling Debate: The issue of raising the debt ceiling remains unresolved and is expected to be a major point of contention in early 2025. Lawmakers will need to address this issue to avoid another potential shutdown.
Political Dynamics: The near shutdown highlighted the divisions within the Republican Party and the influence of key figures like Trump and Musk. The upcoming administration will need to navigate these dynamics to ensure smooth governance.
Economic Policies: The Federal Reserve's upcoming rate decision and other economic policies will be closely watched by traders and investors. The government's fiscal health and spending priorities will play a crucial role in shaping market sentiment.
Latest Trading News for Traders
Stocks
Tesco's Share Price
Current Price: £3.73
Analysis: Tesco's share price is trading around an 11-year high, but some analysts believe it is still undervalued by 41%. However, rising National Insurance contributions and potential cost of living increases pose risks to its earnings.
Support Levels: £3.50, £3.20
Resistance Levels: £4.00, £4.50
Los Dos Amigos Closure
The popular Mexican restaurant in Portsmouth announced its last day of trading due to a "broken business model" in today's climate. This highlights the ongoing challenges small businesses face in the current economic environment.
Forex
FXiBot Launch
Avenix Fzco has launched FXiBot, a forex robot designed to enhance trading strategies through advanced data processing and systematic trading protocols. This innovation reflects the growing trend of automation in forex trading.
Currency Movements
USD/JPY: The USD/JPY has been on a six-day rally.
Support Levels: 1.25, 1.23
Resistance Levels: 1.30, 1.32
EUR/USD: The EUR/USD has slid after the European Central Bank's rate cut.
Support Levels: 1.05, 1.03
Resistance Levels: 1.10, 1.12
Cryptocurrencies
Bitcoin (BTC)
Current Price: $106,000
Analysis: Bitcoin has hit a new record high ahead of an expected Federal Reserve rate cut.
Support Levels: $100,000, $95,000
Resistance Levels: $110,000, $115,000
Ethereum (ETH)
Current Price: $3,900
Analysis: Ethereum prices have remained steady amid a broad crypto market pullback.
Support Levels: $3,800, $3,600
Resistance Levels: $4,100, $4,300
Commodities
Gold (XAU/USD)
Current Price: $1,800
Analysis: Gold prices have been muted as traders brace for the Federal Reserve's rate decision.
Support Levels: $1,750, $1,720
Resistance Levels: $1,850, $1,900
Oil Prices
Oil prices have been volatile due to geopolitical tensions and supply chain disruptions.
Support Levels: $70, $65
Resistance Levels: $75, $80
Indices
Nasdaq Futures
Current Price: 15,000
Analysis: Nasdaq futures have been flat after the tech-heavy index lost sight of record highs.
Support Levels: 14,800, 14,500
Resistance Levels: 15,200, 15,500
Dow Jones
Current Price: 34,000
Analysis: The Dow Jones Industrial Average has seen mixed performance, with some sectors outperforming while others lag behind.
Support Levels: 33,800, 33,500
Resistance Levels: 34,200, 34,500
Upcoming Economic Events
US Inflation Data: The US Personal Consumption Expenditures (PCE) price index is expected to be released on Friday, December 20th. This data is closely watched by traders as it influences the Federal Reserve's monetary policy decisions.
Central Bank Rate Decisions: The Federal Reserve is scheduled to announce its rate decision on Wednesday, December 18th. The Bank of Japan and the Bank of England will also announce their decisions on Thursday, December 19th1.
UK Inflation Data: The UK Consumer Price Index (CPI) is expected to be released on Wednesday, December 18th. This data can impact the GBP/USD exchange rate and other related assets..
