Oftentimes, things have to get worse before they can get better. I noted on Friday that the polls suggest a broadly apathetic public. The shutdown forces voters to pay attention, and more importantly, to choose sides, which is necessary for a resolution of the current impasse. Various reports over the weekend suggested that both Democrats as well as Republicans in the House believed that a shutdown would benefit their party. Hopefully we will get a clear message from the electorate as to which side is correct.
According to media reports, the mid-90’s shutdown was initiated by Speaker Gingrich, and ultimately ended by the Republican Majority leader in the Senate, Bob Dole, when they decided to pull the plug. The time around, McConnell is currently a no-show, so it’s not clear how things will evolve. Another difference was that the last time, Clinton’s approval ratings were above 50 and rising. This time around, Obama’s approval rating is below 50 and declining.
- Chicago PMI improved to 55.7 vs 54 exp and 53 prev
- US government shutdown looks fairly certain. Midnight is the deadline. They now have 2 weeks to figure out how to move forward before the debt ceiling is hit.
- South Korea Business Survey jumped to 82 in Oct vs 77 prev
- Japan Markit PMI improved to 52.5 vs 52.2 prev
- Japan Industrial Production declined to -0.2% YoY in Aug vs +0.5% exp and 1.8% prev
- China HSBC Mfg PMI improved to 50.2 vs 51.2 exp and 50.1 prev
- Core CPI in the Eurozone was +1.0% in September versus +1.1% expected.
- Italy’s government is teetering on the verge of collapse after the surprise resignation of Silvio Berlusconi’s centre-right PDL from the coalition on Friday. Snap elections in Q1 look likely
- Canada GDP rose 1.4% YoY IN July vs 1.3% exp and 0.9% prev
- CLO issuance hits highest level since before financial crisis: A spurt in sales last week has helped push US issuance of so-called “collateralised loan obligations” so far this year to at least $55.41bn, according to S&P Capital IQ LCD – the highest since the $88.94bn sold in 2007, just before the financial crisis. FT
- Tue: China Mfg PMI, Australia Retail Sales, RBA, EU PMI, US PMI, Japan Money Supply, Australia Trade Balance, Building Approvals
- Wed: ECB, US ADP Employment, China Non-Mfg PMI
- Thu: Europe PMIs, US Jobless Claims, ISM Non-Mfg, China Markit Services PMI