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Global economy continues to hum along despite political headwinds, weather
September 12, 2017, 1:05 pm

The global economy continues to hum along, though political headwinds and weather conditions have complicated matters in recent weeks, a report issued by the National Bank of Kuwait (NBK) said Tuesday. While the major economies have either maintained robust growth or seen some improvement, the North Korea crisis and severe weather conditions in the US have weighed on markets, it added.

Analysts also began to question whether promised US reforms will materialize following months of legislative failures. Thus, despite the improving economic figures, yields have declined generally and stock markets have lost some of their gains, it said.

The US dollar also continued its retreat from its 2016 highs, in part as the eurozone outlook has improved, it noted. It said that markets, which had been anticipating a significant stimulus from promised tax reform, have begun to question whether this can still be agreed upon this year.

Also, a debt ceiling and budget fight was expected in September, though this has now been pushed to later in 2017, after president Trump struck a deal with congressional Democrats.

Markets were initially worried that failure to reach an agreement on a new budget and the debt ceiling could force a government shutdown, ultimately delaying the Fed's next rate hike.

The risk of this has now receded following the deal to postpone the debt-ceiling question. Meanwhile, US growth has remained robust, with most indicators either steady or improving. The latest ISM indexes were no exception, with the manufacturing index hitting its highest level since 2011. 

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