fbpx
  • Market Insights  >  Weekly Outlook

18 May 2023,06:21

Weekly Outlook

Debt Ceiling Optimism Overshadows Macro Data

18 May 2023, 06:21

Share on:
FacebookLinkedInTwitterShare
Share on:
FacebookLinkedInTwitterShare

The dollar has hit a 7-week high after significant progress on the debt ceiling bill has been reached.

Macroeconomic data has taken a backseat as the U.S. nears its 1 June debt ceiling deadline as outlined by Treasury Secretary Janet Yellen. Unlike the hard data of economic releases, this is a political issue, and all eyes are on the outcome of talks between U.S. President Joe Biden and the Republicans in congress. 

Risk appetite has been boosted on confidence surrounding the government’s ability to pay its bills on time, especially with Biden and House Speaker Kevin McCarthy jointly expressing confidence that the American government will not default. 

Asset Classes Cheer Debt Ceiling Bill Progress

As a result, Wednesday’s economic data has been overshadowed, with generally inverse assets moving in tandem on the news.A lower-than-expected increase in building permits for April failed to put sufficient downward pressure on the dollar. The dollar index has surged to a 7-week high, moving to just below 103.

Crude oil has also overcome double headwinds of a surging dollar and a much higher-than-expected inventory build of 5 million against an expected draw of 920K. The black gold saw a rebound above the 72 area. 

The general optimism has also spread to bitcoin, which saw the cryptocurrency surge roughly 2% overnight. 

What’s Next?

Dollar strength is expected to continue on investors betting on the high chance that the U.S. will raise the debt ceiling, although significant volatility is to be expected until a decision has been put to law. However, it’s important to note that the wider inflation-interest rate narrative still remains. Thursday’s Initial Jobless Claims data is expected to show a decrease against last month; while the same day’s Existing Home Sales for April is expected to drop 0.14M to 4.30M.

Majority of punters (72%) are now betting on a pause on hikes, although, as previous Fed meetings indicate, the final decision will still be reliant on whether inflation eases up significantly. 

Investors are advised to look out for the speech by Fed Chair Jerome Powell on Friday, 19 May at 18:00 (GMT+3), where investors might find more clues on coming rate hikes. 

As a  friendly reminder, do keep an eye on market changes, control your positions, and manage your risk well.

Start trading with an edge today

Trade forex, indices, metal, and more at industry-low spreads and lightning-fast execution.

  • Start trading with deposits as low as $50 on our standard accounts.
  • Get access to 24/7 support.
  • Access hundreds of instruments, free educational tools, and some of the best promotions around.
Join Now

Latest Posts

Szybkie i łatwe otwieranie konta

Utwórz Konto na Żywo
  • 1

    Zarejestruj się

    Zarejestruj się na Live Account w PU Prime za pomocą naszego procesu bez żadnych kłopotów.

  • 2

    Fundusz

    Bez wysiłku doładuj swoje konto za pomocą szerokiego zakresu kanałów i akceptowanych walut.

  • 3

    Rozpocznij Trading

    Uzyskaj dostęp do setek instrumentów w ramach wiodących na rynku warunków handlu

Please note the Website is intended for individuals residing in jurisdictions where accessing the Website is permitted by law.

Please note that PU Prime and its affiliated entities are neither established nor operating in your home jurisdiction.

By clicking the "Acknowledge" button, you confirm that you are entering this website solely based on your initiative and not as a result of any specific marketing outreach. You wish to obtain information from this website which is provided on reverse solicitation in accordance with the laws of your home jurisdiction.

Thank You for Your Acknowledgement!

Ten en cuenta que el sitio web está destinado a personas que residen en jurisdicciones donde el acceso al sitio web está permitido por la ley.

Ten en cuenta que PU Prime y sus entidades afiliadas no están establecidas ni operan en tu jurisdicción de origen.

Al hacer clic en el botón "Aceptar", confirmas que estás ingresando a este sitio web por tu propia iniciativa y no como resultado de ningún esfuerzo de marketing específico. Deseas obtener información de este sitio web que se proporciona mediante solicitud inversa de acuerdo con las leyes de tu jurisdicción de origen.

Thank You for Your Acknowledgement!