The US avoids default

Wells Fargo Research Team Wells Fargo

Summary

United States: The US avoids default

This week, Congress and the president prevented what would have been the first default in U.S. history by agreeing to suspend the debt ceiling through the end of 2024. Despite a bewildering jobs gain that defied market expectations, data on balance continued to suggest that economic activity is slowing, albeit gradually.
Next week: ISM Services (Mon), Trade Balance (Wed)

International: Canadian growth rebounds, Eurozone inflation trends lower

The Canadian economy advanced at a 3.1% annualized rate in the first quarter of 2023, boosted by household spending and strong exports. Meanwhile, Eurozone CPI data showed that headline and core inflation slowed more than consensus expectations. The headline rate slowed to 6.1% year-over-year, while the core measure that excludes more volatile items, such as food and fuel, decelerated to 5.3%.
Next week: RBA Policy Rate & Australia GDP (Tue/Wed), BoC Policy Rate (Wed), Mexico CPI (Thu)

Credit market insights: Beige book may be flashing red lights in the future

The Federal Reserve System's latest Beige Book showed that regional economies generally chugged along with little change over April and early May, but a slowdown is evident on the horizon, with some sectors already in decline.

Topic of the week: The Mountains vs Miami: Stacking up the NBA and NHL finalists

This year's NBA and NHL finals are a mirror matchup between a top-seeded team from the Mountain West and an underdog team from Miami. Shiny hardware and eternal glory aside, how are the local economies poised to benefit from the finals festivities?

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Wells Fargo Research Team

Wells Fargo

AUD/USD trims some losses, bounces back to 0.7150

AUD/USD has traded on the back foot on Monday, coming close to the 0.7100 mark before rebounding toward the 0.7150 region ahead of the opening bell in Asia. The Greenback’s solid performance has kept the risk complex under pressure, sending the Aussie to fresh monthly lows on the back of rising bets for a Fed rate hike this week. on Tuesday, investors are now expected to closely follow key data releases in China.

USD/JPY: Japanese Yen edges lower vs USD amid Middle East jitters as Fed, BoJ meetings loom

The USD/JPY pair attracts some buyers at the start of a new week and climbs closer to the 154.00 mark during the Asian session, reversing a part of Friday's losses. Spot prices, however, remain confined in a range held over the past week or so and within striking distance of a nearly seven-month low, touched last Tuesday, as traders await this week's key central bank events.

Gold retests $4,300; USD losses momentum

Gold picks up fresh upside traction and challenges the key $4,300 mark per troy ounce on Monday. The yellow metal, however, remain on the back foot on the back of marked gains in the US Dollar and rising US Treasury yields across the curve.

JasmyCoin: Upbit delisting raises risk of further losses

JasmyCoin shows signs of stability at the time of writing on Monday. However, the token remains constrained between support at $0.0035 and resistance at $0.0040. Since May, its technical structure has continued to deteriorate, with the price falling from highs of $0.0078. JASMY’s outlook suggests that bears have the upper hand as bulls fight to defend key support levels.

Will the Fed deliver the hawkishness markets are pricing in?

Fed hike bets increase after PPI and CPI reports. Updated dot plot to be crucial for the dollar’s reaction. Warsh’s independence faces test amid Trump’s pressure for lower rates. For the Dollar to extend gains, Fed needs to satisfy current hawkish bets.

Venezuela’s 65-billion-barrel Oil deal could reshape America’s inflation fight

The United States (US) has secured unprecedented access to part of Venezuela’s vast Oil reserves. The timing is particularly significant as the war with Iran is disrupting Middle Eastern supplies, keeping energy prices elevated and reviving concerns about inflation.