The House was supposed to vote on a continuing resolution at 4:00 p.m. ET to avert a government shutdown on Friday (Mar 14). The vote seems to have been delayed, but keep an eye on the headlines. "House Republicans have a very narrow majority, so it’s always tricky," warned our US economist
. "But, I would think Trump and Johnson will get enough people on board to pass it at some point this week." 60 Senators, which must include some Democrats, will then need to vote in favor of the CR.
If the vote stalls in either chamber, it would show a lack of compromise within Congress and, consequently, risk that future policy proposals, such as around the debt ceiling, stall or possibly don't get passed at all. US bond markets will be sensitive to debt ceiling developments and, thus, may be particularly vulnerable to Congressional headlines ahead.
INR: Industrial Production due Wednesday at 10:30 GMT for January. Our economists expect IP to pick up back towards 4.6% YoY vs 3.2% prior. CPI YoY at 10:30 GMT for February should print softer, driven by falling vegetable prices. Citi Economics expects a 3.7% YoY print..
ZAR: South Africa budget decision on Wednesday. Citi Economics provides a Budget 2.0 preview: Our baseline is for a smaller 0.5% VAT hike given the need to fund the SRD grant than the initial proposal of 2%. The YTD main budget deficit will likely be smaller, at 4.6% of the GDP VS -4.8% previously penciled. Expenditure could be reduced somewhat ~ZAR 35bn. Politics of a VAT hike need to be monitored carefully.
