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Last minute Senate deal avoids US Default

At the eleventh hour the US Senate compromised to pass a bill, raising the debt ceiling and re-opening the government. The raise of the debt ceiling until early next year is a short term fix, for a much larger issue. The US government spends more each month than it raises in taxes, with the difference funded through debt.

The political stalemate has meant the US government has had to shut down some services, as it neared running out of cash and being unable to meet its debt requirements.  The 16 day shutdown has been an embarrassing episode for the global reserve currency, and led to Fitch putting the country on Negative watch.

Following the announcement that the impasse had been broken, US indices rallied and gold traded lower. Overnight in Asia, shares rallied as the fear of a US default was dismissed, for now

Dagong Global Credit Rating

On Thursday, a Chinese rating agency has cut the US sovereign debt by one notch to A-minus from A, stating that the deal made by Senate, has failed to solve the debt problem

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