Washington’s wrangling over a partial government shutdown and lifting the U.S.’s borrowing limit has strategists cutting their forecasts for the dollar for a third straight month, the longest stretch this year.
The market for corporate borrowing through IOUs expanded to the highest level in eight months as investors turned to alternatives to short-term Treasury bills while a congressional impasse over raising the U.S. debt ceiling threatens to tip the nation into default.
European stocks have risen half as much as global benchmarks this year, leaving them cheaper than equities in the U.S. and Asia as the region’s economy starts to recover from the longest recession on record.
Financial markets are more at risk from policy makers getting spending and interest rates wrong than rising oil prices, according to investment strategists in Scotland overseeing about 530 billion pounds ($850 billion).
Whether divining Chinese interest rate policy, worrying about U.S. government finances or valuing Spanish bonds, strategists in Edinburgh say one thing is clear about next year: politics trump economics.
The Federal Reserve’s effort to reduce borrowing costs is unlikely to help the housing market enough to bolster the economy, according to Andrew Milligan, Standard Life Investments Ltd.’s head of global strategy.
The Dow Jones Industrial Average climbed to a record, erasing losses from the financial crisis, as China vowed to maintain its growth target and investors bet central banks will continue stimulus measures.