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

EUR/USD deflates to fresh lows, targets 1.1600

The selling pressure on EUR/USD now gathers extra pace, prompting the pair to hit fresh multi-week lows in the 1.1625-1.1620 band on Friday. The continuation of the downward bias comes in response to further gains in the US Dollar as market participants continue to assess the mixed release of US Nonfarm Payrolls in December.

GBP/USD breaks below 1.3400, challenges the 200-day SMA

GBP/USD remains under heavy fire and retreats for the fourth consecutive day on Friday. Indeed, Cable suffers the strong performance of the Greenback, intensified post-mixed NFP, and trades at shouting distance from its critical 200-day SMA near 1.3380.

Gold flirts with yearly tops around $4,500

Gold keeps its positive bias on Friday, adding to Thursday’s advance and challenging yearly highs in the $4,500 region per troy ounce. The risk-off sentiment favours the yellow metal despite the firmer tone in the Greenback and rising US Treasury yields.