-1684228493.png)
Next Round of Talks on Watch
US debt ceiling negotiations continue today and focus is on the US Dollar given the two-way risks around the issue. Given the lack of progress so far, there are limited expectations that any resolution will be agreed today. As such, USD might trade higher into the middle of the week given increased safe-haven demand.
Biden Optimistic – McCarthy Less So
Over the weekend, president Biden expressed optimism that a deal could be done to avoid an historic debt default. However, Speaker of the House struck a different tone noting that the two sides were still very far apart and that in order to get a deal passed through both houses in time an agreement would need to be in place by the end of this week. Given that Biden leaves tomorrow for the G7 meetings in Japan, today represents the last real (scheduled) chance to achieve a deal.
Market Impact
As such, if today’s talks pass without resolution markets will likely move to price in a higher likelihood of a US debt default which should see risk assets pressured lower while USD and other safe-havens rally. On the other hand, given the limited expectations, should any positive news emanate from today’s talks, particularly if a resolution is unexpectedly agreed, this will likely see stocks rallying sharply while USD peels off.
Technical Views
Nasdaq
The rally in the Nasdaq has seen the index breaking out above the 13237.4 level, supported by bullish momentum studies readings. While above this level the focus is on a continuation higher with 13752.6 the next objective for bulls.
.png)
Disclaimer: The material provided is for information purposes only and should not be considered as investment advice. The views, information, or opinions expressed in the text belong solely to the author, and not to the author’s employer, organization, committee or other group or individual or company.
Past performance is not indicative of future results.
High Risk Warning: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 75% and 75% of retail investor accounts lose money when trading CFDs with Tickmill UK Ltd and Tickmill Europe Ltd respectively. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Futures and Options: Trading futures and options on margin carries a high degree of risk and may result in losses exceeding your initial investment. These products are not suitable for all investors. Ensure you fully understand the risks and take appropriate care to manage your risk.
With 10 years of experience as a private trader and professional market analyst under his belt, James has carved out an impressive industry reputation. Able to both dissect and explain the key fundamental developments in the market, he communicates their importance and relevance in a succinct and straight forward manner.