Agreement on US Budget Woes in Sight

Aug. 1, 2011 - PRLog -- Democratic Senate Majority Leader Harry Reid approved a preliminary agreement with Republican leaders and the Obama administration to raise the US government’s debt ceiling and expect it to also receive approval from Democrats in the Senate, according to Reid’s press-secretary.

Congressional leaders and the Obama administration held negotiations over the weekend to finalize details on the agreement to increase the debt limit. The plan was presented to the Senate for a vote Sunday evening and today will be sent to the Republican-majority ruled House of Representatives for approval, which will no doubt bring a sense of calm to the market.

Congressional leaders are currently working on the details of a preliminary, two-party agreement to raise the debt limit by $2.1 trillion, which will be enough to sustain the country’s requirements until 2013. They are preparing to submit a plan to cut $917 billion in spending over 10 years for approval; the plan calls for first raising the limit by $900 billion and creating a special committee by the end of the year to search for ways to cut $1.5 trillion more out of government expenditures.  Legislators must approve this bill by August 2.

DT Trading analysts are betting on Republicans to emerge victorious in the current feud with Obama’s Democrats. However much the president is pleading with legislators to raise the debt limit, Republicans are pushing their plan of spending cuts just as hard. It is quite possible that most of these cuts will come at the expense of recent Democratic gains and increased spending in the areas of healthcare reform and social guarantees, which themselves came with hefty, multimillion-dollar contributions from state coffers.

According to unnamed sources in Washington, the White House also had to give up tax increases for the wealthy, something Republicans have long been opposed to, as one of the consequences of raising the debt limit by Christmas of this year. Futures on American stock indices grew amid optimism among legislators that an agreement would be reached in time to avoid a default on August 2, the day on which, according to the Treasury, US budget funds will run out. The contract on the S&P 500, which expires in September, indicates growth on Monday after its sharpest drop this year – 1%, to 1304 points as of 7:01AM in Tokyo. Futures on the Dow Jones Industrial Average went up 145 points or 1.2% to 12223 points. The US dollar appreciated 0.7% against the yen to 77.79 yen, 1.1% against the Swiss franc, and 0.2% to $1.4376 against the Euro as of 9:44AM in Tokyo.

DT Trading analysts observed oil prices rising at the same time as gold prices were falling. Gold slipped down 1.1% to $1610.70 per troy ounce, while Light Sweet crude oil futures with supplies in September increased 1.6% to $97.19 per barrel on the NYMEX.

DT Trading Analytical Department

# # #

Deep Trust Trading Limited is a progressive Trust Company, dedicated to protect the Customer’s financial interests and to ensure the best trading conditions. We can help you to take advantage of the current market state and increase your capital.