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Markets Update: Markets Cautious Over The Debt Ceiling Deal
Today's important market events:
[EUR] Eurozone CPI (YoY - Apr) - 11:00 CEST
[GBP] BoE Gov Bailey Speaks - 11:50 CEST
[USD] Building Permits (Apr) - 14:30 CEST
[USD] Crude Oil Inventories - 16:30 CEST
Asia-Pacific stocks were mixed on Tuesday, with investors cautious after a weak handover from the US, where risk appetite was clouded by concerns over the debt ceiling.
The meeting between President Biden and congressional leaders on Monday achieved no major breakthroughs, but it was said to be productive and has set the stage for further conversations.
European equity futures were indicative of a flat open, with the Euro Stoxx 50 unchanged after the cash market closed flat on Monday. The US dollar index (DXY) was steady above 102.50, with foreign exchange (FX) markets broadly contained. The New Zealand dollar (NZD) marginally outperformed, while the Japanese yen (JPY) lagged.
In Australia, the S&P/ASX 200 was subdued amid losses across nearly all sectors and following mixed wage price index data.
The Nikkei 225 outperformed and climbed above the 30,000 level for the first time since September 2021, with sentiment also underpinned by stronger-than-expected Japanese gross domestic product (GDP) data.
The Hang Seng Index and the Shanghai Composite Index were lower, with price action contained amid a lack of fresh macro catalysts to detract from the recent streak of disappointing data releases from China.
US equity futures traded rangebound on Tuesday and found some slight reprieve from the recent selling pressure.
European equity futures were indicative of a flat open, with the Euro Stoxx 50 unchanged after the cash market closed flat on Monday.
FX Space
The US dollar index (DXY) traded within a tight range on Tuesday, taking a breather from the prior day's mild gains following mixed data releases and several hawkish-leaning Fed comments.
The euro (EUR) attempted to nurse losses, but the rebound was limited.
The British pound (GBP) languished beneath the 1.2500 handle after yesterday's gyrations and mixed jobs data.
The Japanese yen (JPY) remained underpinned owing to yield differentials and the appetite for risk in Tokyo.
The Australian dollar (AUD) and the New Zealand dollar (NZD) were somewhat varied, with AUD facing headwinds from mixed wage data and after the Chinese renminbi (CNY) breached the psychological 7.0000 level for the first time this year.
The People's Bank of China (PBoC) set the USD/CNY mid-point at 6.9748, compared with expectations of 6.9750 (previous 6.9506).
Overall, currency markets were subdued on Tuesday, with the dollar taking a breather from the prior day's gains. Mixed data releases, hawkish-leaning Fed comments, and US default concerns all weighed on risk appetite and limited gains for the dollar.
Commodity markets were mixed on Tuesday. Crude oil futures were choppy amid mixed private sector inventory data and the flimsy risk appetite. US Energy Information Administration (EIA) crude oil inventory data showed a build of 3.7 million barrels for the week ended May 6, compared with expectations for a draw of 900,000 barrels. US President Biden's administration granted a permit to allow the Mountain Valley pipeline to run through the Jefferson National Forest, according to the New York Times. Spot gold was stuck near the prior day's lows after slipping beneath the key $2,000 per ounce level. Copper futures eked mild gains, with some slight reprieve from the recent selling pressure, but the upside was limited by the cautious risk tone and the current streak of soft Chinese data.
Looking ahead, key economic data releases on Tuesday include Eurozone harmonized index of consumer prices (HICP) (final), US building permits and housing starts, and speeches from Federal Reserve (Fed) Governor Raphael Bostic, Bank of England (BoE) Governor Andrew Bailey, European Central Bank (ECB) Governing Council member Luis de Guindos, ECB Executive Board member Fabio Panetta, and ECB Vice President Luis de Guindos.
General news - Information source from multiple newswires.
The article and the data is for general information use only, not advice!
The Trade Academy Team