Asian markets are trading higher after the approval of the fiscal deal by the Republicans in the United States. These talks have been in the markets since so many days and the markets were quite nervous about the deal going through. Many analysts predicted that this deal would not be approved by the Congress, so the near term cheer in the markets is short lived and the rally will fizzle out.

Exactly, the same thing happened with the Dow Jones index as well as other Asian equities. The deal discussed about raising tax limits on wealthy Americans, and thereby, generating more income for the United States government in the form of tax.

But, yesterday, when the President of the United States, Barack Obama, officially announced that the deal has been approved, the Dow Jones rallied hard and moved from strength to strength.

At the White House, Obama said, \”It appears that an agreement to prevent this New Year\’s tax hike is within sight. It\’s not done. There are still issues left to resolve, but we\’re hopeful that Congress can get it done.” The Dow Jones has been trading weak since the past few weeks on anticipation of a no-deal kind of situation. Lou Barletta, Freshman Republic commented on the deal, “I don’t know if playing chicken with the American people at this point is in the best interest of the people.”

But, as soon as the President announced the clearance, markets began to move higher and all the three major indices in the United States jumped by around 2 percent. The same trend is being followed by the Asian markets this morning and most of them are trading above a percent each in today’s trade. The manufacturing data from China and other Asian equities was also good and that helped the Chinese markets to rally harder.

Obama also added, “There\’s more work to do to reduce our deficits, and I\’m willing to do it. Now, if Republicans think that I will finish the job of deficit reduction through spending cuts alone… then they\’ve another thing coming.” This deal will help the United States economy to grow and will also help the markets to touch new highs.

Markets have waited for the QE3 some months back and the QE3 has come and passed. That didn’t help the markets move in to the up side and cross important resistance levels. But, this deal has made most of the world markets to cross or break their important resistance levels and to trade on the up side.

Meanwhile, some of the republicans are not happy about Obama’s remarks and way of talking at the White House. Bob Corker, Republican Senator, said, “I know the president has fun heckling Congress. I think he lost probably numbers of votes with what he did. It\’s unfortunate he doesn\’t spend as much time solving problems as he does with campaigns and pep rallies. I think there is going to be a pretty big showdown next time when we go to the debt limit.”

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Category: Finances
Keywords: Dow Jones, Manufacturing Data, Fiscal cliff