(Bloomberg) – US stock futures fell as concern about whether legislators in Washington will prevent a government closure added to uncertainty about the prospects for the US economy.
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S&P 500 contracts fell 0.6% and those on the Nasdaq 100 fell 0.8%, after winning on Wall Street was encouraged on Wednesday by a softer than expected inflation print. The European Stoxx 600 index had changed little. Asian shares withdrew.
The US Senate Democratic leader Chuck Schumer said his party would block a Republican Expenditure Act to prevent a government closure on Saturday and insisted on the Gop to accept a democratic plan to provide financing instead until 11 April. The imminent confrontation adds an extra layer for traders who already confront a higher unemployment rate, federal employee reductions and the escalating rate war by President Donald Trump.
“The following obstacle is a potential closure of the US government this Saturday,” says Jim Reid, head of macro research and thematic strategy at Deutsche Bank AG. “We will see if a deal can be closed. The uncertainty may have helped to have helped S&P and Nasdaq Futures to give up their winnings from yesterday. “
Treasuries ran higher when traders later looked ahead to new US economic data on Thursday, with lectures on wholesaler inflation and initial unemployed claims. The dollar was stable. The yen strengthened after the Bank of Japan Gouverneur Kazuo Ueda said he expects real wages and consumer spending to improve.
The risk of closing the US government comes at a time when financial markets are hyper -sensitive to new disruption. Two weeks of increased market volatility have already caused losses for investors and pushed Wall Street-Strates to lower their predictions for US shares, while the Federal Reserve has chosen a patient approach of cutbacks on the interest rate.
“A timely pivot to tax reduction package will be rather important for the market of the market, the poor mood of investors on different tariff threats,” said Homin Lee, senior macro strategist at Lombard Odier. “So any legislative setback such as closure that undermines such an expectation can become a problem.”
Equity strategists recently tempered their expectations about the American market. Goldman Sachs Group Inc. was the last to sound the alarm, according to that at Citigroup Inc. and HSBC Holdings PLC. Earlier this week Citi US shares reduced overweight neutral while he upgrade to overweight.