Trump Signs Bill to End U.S. Government Shutdown

Late in the session on Monday, U.S. President Donald Trump signed into law a bill that ended the government shutdown. The bill funds the government for 17 days, or until February 8, and it funds the popular CHIP children’s insurance program for six years. It does not include a permanent fix for the Obama-era DACA program, which Senate Democrats had originally demanded.

The signing of the bill also provides congressional negotiators with additional time to hammer out an immigration reform package capable of passing both the U.S. House of Representatives and Senate.

The agreement to fund the government did not eliminate the key issues that shut down the government in the first place. However, Senate Majority Leader Mitch McConnell said he intends to bring DACA and other immigration issues up for debate before February 8.

President Trump said he was “pleased that Democrats in Congress have come to their senses.” Trump also pledged, “Once the Government is funded, my administration will work toward solving the problem of very unfair illegal immigration. We will make a long-term deal on immigration if, and only if, it is good for our country.”

The news that the Senate had reached an agreement to resume government operations had an almost immediate effect on the financial markets. U.S. equity market erased slight losses from earlier in the session to close higher on Monday.

U.S. Treasury yields hit highs as after the U.S. Senate reached a short-term compromise to fund the government. The yield on the benchmark 10-year Treasury Note reached 2.661, while the yield on the 30-year Treasury bond hit 2.927.

The dollar recovered from earlier losses, but it remained mired near a three-year low against a basket of currencies.

Gold prices edged up early Tuesday in reaction to the price action in the U.S. Dollar. However, the surge in global equities capped further gains after the U.S. government shutdown came to a halt.

Major Asian indexes rose on Tuesday following the stronger lead from Wall Street. Europe is set to open higher in reaction to the strong gains in both U.S. and Asian markets.