Debt-Ceiling Angst Risks Ginning Up Treasuries’ Haven Appeal
- JPMorgan data show yields fell in recent debt-ceiling clashes
- BMO Capital Markets says Japanese yen could gain in haven bid
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The U.S. debt-ceiling battle should continue unnerving global investors even after a respite brought by the possibility of a short-term deal. While a dire outcome of a default could send shockwaves throughout markets, the irony is that Treasuries might actually do well in this case.
Concerns cooled Wednesday after Senate GOP leader Mitch McConnell offered Democrats an agreement on raising the debt ceiling through November. Yet the move is seen by traders as just a temporary reprieve, pushing back the partisan confrontation over the nation’s borrowing limit -- but not really resolving it.