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Tuesday Morning Coffee Markets Update 23 May 2023 - Markets Indecisive as Debt Limit Talks Continue

Global Markets

Markets Update: APAC Markets Indecisive as Debt Limit Talks Continue; Flash PMIs and Central Bank Speakers Ahead


Today's important market events:

  • [EUR] German Manufacturing PMI (May) - 09:30 CEST

  • [GBP] Composite PMI/Manufacturing PMI/Services PMI - 10:30 CEST

  • [USD] Building Permits - 14:00 CEST

  • [USD] Services PMI (May) - 15:45 CEST

  • [USD] New Home Sales (Apr) - 16:00 CEST


Global Markets Roundup: 23 May 2023


  • Asian stocks were indecisive on Monday as participants digested the latest news from the U.S. debt limit negotiations. U.S. House Speaker Kevin McCarthy said he had a productive conversation with President Joe Biden, but the two sides have not yet reached an agreement.

  • The Nikkei 225 was down 0.2%, the Hang Seng Index was up 0.1%, and the Shanghai Composite Index was up 0.3%.


  • European equity futures are indicative of a flat open with the Euro Stoxx 50 unchanged after the cash market closed down by 0.2% on Friday.

  • The U.S. dollar index (DXY) is steady on a 103 handle, and FX ranges are narrow across G10 FX. The euro (EUR/USD) is lingering just above 1.08.


  • U.S. equity futures are indicative of a flat open.

  • President Biden and House Speaker Kevin McCarthy are expected to continue their discussions on the debt limit on Monday.

  • The 10-year U.S. Treasury yield is steady at 2.95%.

Foreign Exchange

  • EUR/USD was rangebound, with the single currency eyeing a retest of support around the 1.0800 level.

  • GBP/USD lacked direction after the prior day's choppy performance and ahead of several Bank of England (BoE) speakers later.

  • USD/JPY briefly extended to a fresh 6-month high of 138.87 after the recent widening of yield differentials.

  • Antipodeans were indecisive owing to the mixed risk tone and ahead of tomorrow's Reserve Bank of New Zealand (RBNZ) meeting.

  • The People's Bank of China (PBoC) set the USD/CNY mid-point at 7.0326, slightly above market expectations of 7.0327.

Fixed Income

  • 10-year U.S. Treasury futures languished near the prior day's lows after having bear flattened amid the latest bout of central bank rhetoric, which suggested the potential for a "skip" and not a "pause" by the Federal Reserve (Fed).

  • Bund futures traded sideways with prices stuck near a base at the 134.00 level.

  • 10-year Japanese government bond (JGB) futures were lower after recent selling in global peers and despite firmer demand at the 10-year inflation-indexed bond auction from Japan.


  • Crude oil futures eked mild gains with early upside amid the initial positive risk tone, although oil prices then came off highs as the mood soured following the lack of any major breakthrough in U.S. debt ceiling talks.

  • Goldman Sachs said rising fears of a U.S. recession and a China slowdown are likely weighing on oil prices and it estimates that forward curves are pricing all the main bearish risks to their USD 95/bbl December 2023 Brent forecast. Goldman Sachs also stated that the oil market is too pessimistic and it expects sustained deficits from June as OPEC+ production cuts are fully realized and demand rises further.

  • Spot gold marginally softened as the greenback held on to its recent advances.

  • Copper futures were subdued by the recent hawkish Fed rhetoric and cautious risk tone.

Key Takeaways

  • The U.S. dollar was broadly higher against major currencies, with the euro and pound coming under pressure amid the lack of progress in U.S. debt ceiling talks.

  • Crude oil prices were slightly higher, but gains were capped by concerns about a potential U.S. recession and a slowdown in China.

  • Gold prices were slightly lower, as the greenback held on to its recent gains.

  • Copper prices were subdued, as investors remained cautious ahead of the release of key economic data from the U.S. and China.

Looking ahead, key economic data releases and central bank speeches will be in focus, including U.S., U.K., and Eurozone flash PMIs, U.S. home sales, speeches from Fed officials Logan, de Guindos, Nagel, Villeroy, and Enria, and speeches from BoE officials Bailey, Pill, Tenreyro, and Mann, as well as supply data from the Netherlands, U.K., Germany, and the U.S.


General news - Information source from multiple newswires.

The article and the data is for general information use only, not advice!

The Trade Academy Team

Post: Blog2_Post
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