World stocks and U.S. bond markets on Monday, January 22, shrugged off a government shutdown in Washington, although the dollar pulled back as the euro continued its strong start to the year.
The MSCI world equity index .MIWD00000PUS, which tracks shares in 47 countries, was also flat. U.S. stock futures were down marginally after Wall Street set record highs on Friday.
U.S. Treasury yields, which fell during previous government shutdowns, rose as investors saw limited economic fallout from the standoff in the U.S. capital and instead focused on a global economy motoring ahead.
European shares traded with little clear direction as markets focused on a flurry of mergers and acquisitions and progress towards an end to political deadlock in Germany.
The pan-European STOXX 600 index was flat. Germany’s .GDAXI DAX was down 0.1 percent, France’s .FCHI CAC-40 was down 0.2 percent and the UK’s FTSE .FTSE was unchanged.
Investors seem confident the conflict between President Donald Trump and Democrats can be resolved swiftly and the U.S. avoid a prolonged shutdown.
“We’re not worried as we have been here before. Perhaps this is more fractious and may take longer to resolve, but it shouldn’t have a massive economic impact,” said Patrick O‘Donnell, investment manager at Aberdeen Asset Management.
A plan put forward by a group of senators to extend government funding to Feb. 8 and work on resolving an immigration dispute has helped ease concerns about a more serious deadlock in Washington.
The benchmark U.S. 10-year Treasury yield US10YT=RR was close to its highest level in more than three years on Monday. US10YT=RR in an extension of the sell-off in U.S. bonds since September, Reuters reports.
