U.S. Raises Government Debt Limit Until December

Asian shares were slightly higher on Thursday morning after U.S. President Donald Trump and his Congressional colleagues committed to raising the government debt limit until December, a move which eliminates the chance of a government shutdown for the near term.

In a somewhat surprising bipartisan agreement, Trump made a deal with Democrats in Congress to provide government funding until December 15. The news bolstered U.S. markets and lifted U.S. Treasury yields, with the 10-year yield rising back to 2.101 percent, up from 10-month lows hit on Wednesday.

Fischer Resigns

Also surprising the markets was news the Federal Reserve Vice Chair Stanley Fischer will be resigning in mid-October for “personal reasons.” Fischer’s resignation comes eight months before his term was set to expire. Fischer’s resignation leaves the door open for Trump to reshape the direction of the central bank which can potentially be left with only three sitting members, out of a possibly seven. The Senate Banking Committee is scheduled to vote on Trump’s nomination of Randal Quarles to the role of vice chairman for supervision later today. Fed Chair Janet Yellen’s term is set to end in February, and it remains unclear whether she will be reappointed.

The dollar struggled in early Asian trade, down modestly against most of its major trading partners. The euro was up 0.08 percent against the dollar as of 11:22 a.m. HK/SIN, to $1.1925. The dollar was down 0.13 percent against the yen as well, trading at 109.08. The greenback also struggled slightly against the Canadian dollar after the Bank of Canada made a surprise move to raise interest rates by a quarter of a percent to 1 percent. The dollar index was down 0.04 percent to 92.19 .DXY just before noon in Hong Kong.