Australian and New Zealand stocks fell as American lawmakers struggled over an accord to raise the nation’s debt limit and restore government operations.
With the U.S.’s borrowing authority set to lapse Oct. 17, Senate leaders in Washington sought a pact to avert a default and re-open the government. Senate Majority Leader Harry Reid was negotiating with Minority Leader Mitch McConnell after talks between President Barack Obama and House Speaker John Boehner broke down. Chinese exports unexpectedly fell in September, data Oct. 12 showed. China and India are set to issue inflation reports for last month today.
“Time is beginning to run out for getting any agreed legislation through before the Oct. 17 lapse in the government’s borrowing authority,” Sharon Zollner, senior economist in Wellington at ANZ Bank New Zealand Ltd., wrote in a client note today.
Japanese and Hong Kong markets are closed today for holidays, while the U.S. bond market is shut for the Columbus Day holiday.
Australia’s dollar lost 0.4 percent to 94.34 U.S. cents, while the New Zealand currency was little changed at 83.19 U.S. cents.
The MSCI Asia Pacific Index climbed 1.3 percent last week amid optimism U.S. lawmakers were moving closer to resolving the debt impasse. The gauge traded at 13.6 times estimated earnings on Oct. 11, compared with 15.4 for the S&P 500.
Reid said he’s “in conversation” with McConnell and is “confident” Republicans will agree to end the partial government shutdown and raise the debt ceiling. McConnell said in a statement that it’s time for Democrats to support a plan, based on one drafted by Republican Susan Collins, which Reid rejected Oct. 12.
The talks are shifting away from Republican efforts to curtail Obama’s signature health-care law to rescinding a tax on medical devices to focus on the level of spending and the duration of the deficit-ceiling extension.
Obama, in a phone call with House Minority Leader Nancy Pelosi of California, “reinforced that there must be a clean debt limit increase” -- and a stopgap spending measure also free of policy add-ons -- before budget negotiations can begin, according to a White House statement.
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