US government shutdown update - Nomura

Nomura Bank analysts explained their US government shutdown update.

Key Quotes:

"Congress struck a deal to reopen the government today, passing a three-week continuing resolution (CR) that extends the government’s spending authority through 8 February."

"The CR passed the Senate after clearing an important procedural vote by a margin of 81-18, with 33 Democrats joining 48 Republicans to end debate and move the bill forward."

"At the time of writing, the House is expected to take up and pass the Senate’s CR, sending it to the President for his signature."

"The CR effectively returns the government to normal operations after nonessential personnel were furloughed today and other services were temporarily halted. However, significant work needs to be done to strike a longer-term deal and avoid a repeat shutdown when the new CR expires after 8 February."

"The CR did not include language on a DACA agreement or a longer-term budget deal, indicating that Congressional leaders will need to continue working on those issues over the next few weeks. We continue to expect that the final deal will result in a substantial increase in federal spending, possibly for both FY2018 and FY2019."