Trump the Independent - Rabobank

"The deal between President Trump and the Democrats to avert a government shutdown and default has reversed the recent rise in yields on treasuries that were due to mature near the implied default window," explain Rabobank analysts.

Key quotes:

"However, if the deal is approved by Congress there will be a new deadline for a government shutdown in December, while the debt ceiling will return in 2018, several months before the midterm elections. More generally, this deal could mark the shift of Trump from being a Republican President to acting like an Independent President."

"Trump’s bipartisan approach opens the door to more progress on legislation, but both President Trump and the Republicans will have to compromise as the Democrats now have increased leverage. This could reduce the size of tax cuts for corporations and high-income individuals that President Trump and the Republicans have in mind."

"Meanwhile, the deal will make it easier for the Fed to announce the start of balance sheet normalization on September 20 with implementation shortly thereafter. However, yesterday’s resignation by Fed Chairman Fischer has further reduced the probability of a third rate hike this year."