Is there a path to a deal?
I think the turn in equities at the moment is all about hopes for a new US stimulus package.
This is from a Bloomberg reporter:
Mnuchin says White House counteroffer will be similar to Problem Solvers $1.5 trillion plan. Key point on plan: it has an escalator clause that could allow $2 trillion if virus persists, closer to Pelosi's $2.2 trillion level
This is a genuine attempt at compromise. I can see the case from both sides for making it happen but the devil is in the details.
Mnuchin said earlier we will know by tomorrow afternoon if there is a path to a deal.
The talk is clearly having an effect on the market and I believe it's why we've seen the sharp turnaround in equity markets. The S&P 500 is up 0.8% after falling as much as 1.0% premarket. US 30-year yields are also up 3.6 bps to 1.45% suggesting that more supply could be coming.
