Good morning, and welcome to our rolling coverage of the world economy, the financial market, the eurozone and business.
A burst of optimism is rippling through the markets this morning, after US lawmakers reached a tentative deal to avoid another government shutdown.
Overnight, Democrats and Republicans agreed a new spending package, which includes some more money to fund border security. Assuming president Trump signs it off, the deal will keep the Federal government running beyond Friday.
After weeks of deadlock, Republican Senator Richard Shelby emerged to tell reporters that “an agreement in principle” had been reached, and that staff would be “working feverishly to put all the particulars together.”
The deal will provide some money to construct fencing on the US-Mexico border, but this really doesn’t look like a win for Trump.
That’s because Congress is only providing $1.4bn for extra border security, not the $5.7bn the White House had asked for.
As my colleague Tom McCarthy explains:
The agreement would allocate far less money for Trump’s border wall than the White House’s $5.7bn wish list, settling for a figure of nearly $1.4bn, according to congressional aides. The funding measure is through the fiscal year, which ends 30 September.
The agreement means 55 miles of new fencing — constructed through existing designs such as metal slats instead of a concrete wall — but far less than the 215 miles the White House demanded in December. The fencing would be built in the Rio Grande Valley in Texas.
Money has also been set aside for technology such as advanced screening at border entry point, humanitarian aid, and additional customs officers.
News of the breakthrough boosted markets in Asia, where Japan’s Nikkei jumped by 2.61%, or 531.04 points, to end at 20,864.21.
European markets are expected to rise at the open too.
The deal comes as US officials prepare for fresh talks with China over the trade war – another Trump bugbear that has been worrying the markets. Treasury secretary Stephen Mnuchin and trade representative Robert Lighthizer are due to meet Chinese Vice Premier Liu He in Beijing on Thursday.
Yesterday, White House adviser Kellyanne Conway revealed that president Trump is still keen to meet China’s Xi Jinping “very soon” to hammer out a deal, saying:
“This president wants a deal. He wants it to be fair to Americans and American workers and American interests.”
Given the slowing global economy, investors would welcome a breakthrough – before even more tariffs are imposed on US and Chinese goods.
Also coming up today
Bank of England governor Mark Carney is speaking about the global economy, and risks to the outlook, at an event in London, organised by the Financial Times. Trade wars will probably come up.
Otherwise it’s a quiet day.
- 1pm GMT: Bank of England governor Mark Carney discusses the global economy