Asian markets upbeat on US debt deal

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Asian stocksGlobal markets welcomed a last-minute deal in Washington to reopen the federal government and avoid a debt crisis, with Asian stocks and bonds following gains in the US while the dollar touched a three-week high against the yen and treasuries rose.

The approval by Congress in the US on October 16 gives investors a temporary reprieve after a 16-day government shutdown dominated the attention of markets around the world throughout October. The stalemate among US lawmakers had threatened to push the world’s largest economy toward a debt default.

There were substantial gains in Southeast Asia, with Indonesia’s benchmark index up 0.8 per cent and the Philippines’ rising 0.7 per cent. Emerging-market currencies in the region also rose as officials welcomed the deal.

Asian corporate bonds also rallied, with prices in both investment-grade blue-chip firms and high-yield bonds rising. At the same time, the cost of insuring against a potential default using credit default swaps fell. Although stocks across the region were uniformly higher, the gains were moderate, reflecting the calm manner in which Asia has reacted to the deadlock in Washington in recent weeks.

Most currencies in Southeast Asia were up against the US dollar on October 17, with the Malaysian ringgit, the Indonesian rupiah and the Thai baht leading the pack.

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Reading Time: 1 minute

Global markets welcomed a last-minute deal in Washington to reopen the federal government and avoid a debt crisis, with Asian stocks and bonds following gains in the US while the dollar touched a three-week high against the yen and treasuries rose.

Reading Time: 1 minute

Asian stocksGlobal markets welcomed a last-minute deal in Washington to reopen the federal government and avoid a debt crisis, with Asian stocks and bonds following gains in the US while the dollar touched a three-week high against the yen and treasuries rose.

The approval by Congress in the US on October 16 gives investors a temporary reprieve after a 16-day government shutdown dominated the attention of markets around the world throughout October. The stalemate among US lawmakers had threatened to push the world’s largest economy toward a debt default.

There were substantial gains in Southeast Asia, with Indonesia’s benchmark index up 0.8 per cent and the Philippines’ rising 0.7 per cent. Emerging-market currencies in the region also rose as officials welcomed the deal.

Asian corporate bonds also rallied, with prices in both investment-grade blue-chip firms and high-yield bonds rising. At the same time, the cost of insuring against a potential default using credit default swaps fell. Although stocks across the region were uniformly higher, the gains were moderate, reflecting the calm manner in which Asia has reacted to the deadlock in Washington in recent weeks.

Most currencies in Southeast Asia were up against the US dollar on October 17, with the Malaysian ringgit, the Indonesian rupiah and the Thai baht leading the pack.

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