The United States national debt clock ticks away in New
York yesterday. Photo by Reuters.
Global markets are likely to continue drifting without
direction until a resolution is reached on the United States
debt crisis, Craigs Investment Partners broker Chris Timms said
There was a suggestion earlier yesterday an agreement would
be reached but at 4pm, reports from Washington said while US
Senate leaders continued to negotiate, a deal was not
expected last night.
Lawmakers said a deal was close on legislation to raise the
nation's borrowing authority and provide temporary government
funding, but details remained to be finalised.
The Senate and House of Representatives are scheduled to hold
sessions today (NZ time) and they may debate any deal Senate
leaders ultimately strike.
Congress is racing against an October 17 deadline, when the
Treasury Department says it will bump up against its legal
If Washington does not reach a deal, the Government by law
will no longer be able to add to the national debt and will
have to rely on incoming revenue and about $US30 billion
($NZ35.75 billion) in cash to pay the nation's many
If the money runs out, a global financial crisis could follow
if investors decide US debt, used as collateral for trillions
of dollars in financial deals, are no longer worth holding.
Ratings agency Fitch warned it could cut America's prized AAA
Mr Timms looked across most markets which were trading
yesterday and noted either slight rises or slight falls of
value around the world. The NZX had a ''reasonable day'' but
was being driven by domestic demand rather than anything
''It seems the deal is going right down to the wire, like
last time. In the meantime, everyone is sitting on their
hands waiting to get direction from the US,'' he said.