Markets in Mildly Positive Mood as Another Debt Ceiling Talk Awaited
| Action Insight Daily Report 5-22-23 |
Markets in Mildly Positive Mood as Another Debt Ceiling Talk Awaited |
Mood is generally positive in Asian session today, with Hong Kong HSI leading other major indexes higher. While the G7 communique released after the meeting in Hiroshima drew furious response from both China and Russia, there was little reactions among investors. Dollar is trading mildly lower, followed by Canadian and Aussie. Kiwi is currently the stronger one as markets await this week's RBNZ rate hike. Yen is also recovering, followed by Euro and Swiss Franc. But overall, almost all major pairs and crosses are bounded inside Friday's range. Investors are likely to focus on a scheduled meeting between US President Joe Biden and Republican House Speaker Kevin McCarthy concerning the contentious issue of raising the debt ceiling. Reiterating her cautionary stance, Treasury Secretary Janet Yellen warned on Sunday that the "hard deadline" of June 1 remains in place for augmenting the debt limit. Yellen expressed concern about the looming deadline, stating, "my assessment is that the odds of reaching June 15 while being able to pay all of our bills is quite low." Any updates regarding this matter are expected to significantly sway the market. On a technical front, Gold's recent drop from 2062.95 stalled after hitting a low of 1951.77 last week. Nonetheless, outlook remains the same – the precious metal is seen to be in the process of correcting the rally from its 2022 low at 1614.50. Deeper fall is expected, with a break below 1951.77 targeting 38.2% retracement of 1614.60 to 2062.95 at 1891.68. Yet, breaking minor resistance of 1999.30 would dampen this bearish view, potentially sparking a robust rebound back to 2062.95, or even challenging the record high of 2074.48. The next move in Gold will be used to gauge, or at least confirm, that of Dollar's as usual. In Asia, at the time of writing, Nikkei is up 0.39%. Hong Kong HSI is up 1.30%. China Shanghai SSE is up 0.11%. Singapore Strait Times is up 0.08%. Japan 10-year JGB yield is down -0.0185 at 0.389. |
USD/CAD Daily Outlook Daily Pivots: (S1) 1.3470; (P) 1.3496; (R1) 1.3524; More.... Intraday bias in USD/CAD remains neutral as range trading continues. Overall, the pair is seen as extending the triangle consolidation pattern from 1.3976. Above 1.3566 will resume the rebound from 1.3313 towards 1.3666 resistance and then 1.3860. However, firm break of 1.3313 support will invalidate this view and indicate that deeper correction is underway. | |
| GMT | Ccy | Events | Actual | Forecast | Previous | Revised |
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| 23:50 | JPY | Machinery Orders M/M Mar | -3.90% | 0.70% | -4.50% | | 10:00 | EUR | German Buba Monthly Report | | 14:00 | EUR | Eurozone Consumer Confidence May P | -17 | -18 |
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