Investors hold their breath as U.S. debt talks edge towards deal
Global stock markets were muted on Friday, with investors holding their breath as the White House and U.S. lawmakers edged towards a deal on funding government spending to avoid an economy-shattering default.
U.S. President Joe Biden and top congressional Republican Kevin McCarthy are closing in on an agreement that would raise the government’s $31.4 trillion debt ceiling for two years while capping spending on most items.
The dollar retreated from a two-month high, helping to lift gold , though the yellow metal was poised for a third straight weekly drop as markets expect a debt ceiling deal.
Oil was broadly steady while the dollar remained near a two-month high against its major peers, buoyed by expectations that U.S. interest rates could remain higher for longer.
“This week has been a bit of wake up call to rate expectations. There is a realisation that inflation is going to be stickier for a lot longer,” said Mike Hewson, chief markets strategist at CMC Markets.
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