Stock markets recovered on Friday as traders cashed in profits on their recent shorts and as talks between President Joe Biden and House Speaker Kevin McCarthy appear to be inching closer, says Axel Rudolph, Senior Market Analyst at online trading platform IG.
Can a US debt ceiling agreement be reached in time?
“With US Democrats and Republicans squabbling over the last $70 billion, investors increasingly hope for a signed debt ceiling agreement before 1 June. The question is whether it'll be made in time as Congress breaks up for a holiday weekend? With UK and several European countries also enjoying a prolonged weekend, investors squared their positions on Friday, leading to a short squeeze and positive close on the day.”
US data points towards further Fed rate hike in June
“Stronger US data over the past couple of days, and a higher reading of the Fed's preferred PCE inflation gauge as well as stronger-than-expected personal spending, led to a rise in the probability of another rate hike being seen in June. According to the CME FedWatch tool, 44.3% of investors expect the fed funds rate to rise to between 5.00% to 5.25% in June and 55.7% to 5.25% to 5.50%.”
This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients.
Follow us on Telegram
Stay updated of all the news
EUR/USD battles 1.0700 after mixed Eurozone data
EUR/USD has come under renewed selling pressure, battling 1.0700 after mixed Eurozone Retail Sales data for April. The pair remains undermined by the cautious market mood, disappointing German Factory Orders and a broad US Dollar rebound.
GBP/USD turns south toward 1.2400 as US Dollar recovers
GBP/USD is heading south toward 1.2400, meeting fresh supply in the European session. The US Dollar is seeing renewed safe-haven buying amid a risk-off market profile, acting as a headwind to the pair.
Gold oscillates around $1,960 amid mixed responses to Fed’s June policy
Gold price is auctioning inside the woods around $1,960.00 in the early London session. The precious metal is displaying back-and-forth action as the investing community is divided about the interest rate decision by the Fed to be taken in June’s monetary policy meeting.
Is the metaverse hype back in action?
Although there are no major macroeconomic events this week, investors can expect massive volatility on a daily basis. The reasoning behind this outlook is that Apple will be conducting the 2023 Apple Worldwide Developers Conference (WWDC) on June 5.
Markets are likely to focus on ECB commentary
This is a very quiet week in terms of data and hence markets are likely to focus on last minute central bank commentary. The FOMC blackout period kicked off already on Sunday, but today we have a bunch of ECB speakers on the wires.