The ebb and flow of the self-inflicted crisis in Washington is periods of disappointment followed by moments of cautious optimism. Today, stock futures are 1.1% higher and USD/JPY is at the highest of the month. The bull market in stocks is so entrenched that traders want to be long in case a deal is reached and are willing to punt on any hint of good news.
There is a rumor of a six-week deal circulating today but it doesn’t have legs. Its source is probably someone with no more than a calendar and the knowledge that Boehner is meeting Obama at the White House today. It’s Thursday and to get a deal done by the weekend (and Congressional break), some progress is needed today. There are plenty of optimists willing to frontrun it.
Fair enough. The hooks are baited and lines in the water, now we find out if Congress bites. Worrisome thing for me is polls like this showing no reason for the Democrats to negotiate.
