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Daily Market Outlook, May 30 , 2023Despite positive developments in the US debt ceiling negotiations, the risk sentiment remained cautious during the Asian trading session. President Biden and House Speaker McCarthy managed to strike a deal that involved reducing spending in exchange for temporarily suspending the debt ceiling until after the next Presidential election. This agreement is set to be voted on by Congress starting from Wednesday, and if approved, it will prevent a US debt default. However, despite the potential resolution to the debt ceiling issue, investors maintained a cautious outlook. This cautious investor sentiment caused a decline in short-term Treasury bills and most Treasury yields. Investors tended to gravitate towards safer investments, seeking stability amidst the prevailing market uncertainties.The UK data docket for this week is relatively light on major releases. However, the overnight release of the BRC shop price index provided an early indication of May's inflation, showing a slight increase in the overall index to 9.0% from 8.8%. However, food price inflation slowed to 15.4% from 15.7%. Today, there are no significant releases scheduled. However, on early Wednesday, the Lloyds Business Barometer report for May will be released, providing further insights into business confidence, economic activity, and the impact of recent news on inflation and wage expectations.The global focus is currently centred around inflation. This morning, the Spanish CPI data was released printing softer than expected, and tomorrow expect figures from France, Germany, and Italy, which will provide an early indication of the Eurozone's flash estimate, set to be released on Thursday. Market watchers anticipate another significant drop in headline inflation but the core rate is expected to remain relatively stable. These developments are unlikely to prompt any revisions to the market expectations that Eurozone interest rates will be raised by another 25bp in June, despite Germany's economy being confirmed to have entered a recession over the winter.Stateside, the Conference Board's Consumer Confidence gauge for May is anticipated to show a slight easing at the headline level. Investors will be closely watching the Dallas Fed Manufacturing survey for May as a precursor to this week's ISM release, which provides valuable insights into the manufacturing sector. Later this afternoon, the Fed's Discount Rate Minutes will be released, shedding light on the central bank's views on monetary policy. Federal Reserve non-voter Barkin is scheduled to make remarks today, offering additional perspectives on the economic outlook. As we approach the end of this week, the Federal Reserve will enter a blackout period ahead of its policy meeting on June 14th. Current market expectations are divided between an unchanged outcome and a potential 25 basis points rate increase. The outcome of the policy meeting holds significant importance for investors, and market participants will closely monitor any developments leading up to the decision.FX Options Expiries For 10am New York Cut (1BLN+ represent larger expiries, more magnetic when trading within daily ATR)EUR/USD: 1.0650-60 (1.06BLN), 1.0700 (272M)USD/JPY: 137.92-00 (511M), 139.00 (422M), 139.50 (409M)141.00 (406M)EUR/GBP: 0.8700 (779M). AUD/USD: 0.6575 (364M)USD/CAD: 1.3435-45 (546M), 1.3590 (968M), 1.3615 (279M)AUD/JPY: 92.00 (836M)Overnight News of NoteUS Futures Rise After Debt Ceiling Deal Tentatively ReachedBiden, McCarthy Work Lawmakers To Pass Deal As Default LoomsChina Rebuffs Pentagon Chief, Blunting Push For RapprochementBoJ’s Governor Ueda: Japan To Patiently Keep Ultra-Easy PolicyJapan Jobless Rate Falls In Potential Future Boost For BoJ GoalAustralia Building Approvals Slump To Lowest Level In 11 YearsECB’s De Cos: Tightening Cycle Closer To End, Still A Way To GoSunak Looks To Cap Basic Food Prices In Fight Against InflationInflation In UK Shops Hits Record High With Little Sign Of ReliefInsolvency Risk Rises For Larger UK Companies As Inflation BitesSpain’s Embattled Prime Minister Gambles Again On Snap ElectionTurkey's Erdogan Triumphs In Election Test, Extending 20-Year Rule(Sourced from Bloomberg, Reuters and other reliable financial news outlets)Technical & Trade ViewsSP500 Bias: Bullish Above Bearish Below 4200Below 4200 opens 44170Primary support is 4100Primary objective is 426820 Day VWAP bullish, 5 Day VWAP bullishEURUSD Bias: Target Hit – New Pattern Emerging Above 1.0860 opens 1.0950Primary resistance is 1.09Primary objective is 1.066020 Day VWAP bearish, 5 Day VWAP bearishGBPUSD Bias: Intraday Bullish Above Bearish Below 1.2440Below 1.2290 opens 1.2234Primary resistance is 1.2540Primary objective 1.223420 Day VWAP bearish, 5 Day VWAP bearishUSDJPY Bias: Intraday Bullish Above Bearish Below 139.60Below 139.50 opens 138.90Primary support is 137.40Primary objective is 141.7020 Day VWAP bearish, 5 Day VWAP bullishBTCUSD Bias: Intraday Bullish Above Bearish below 26000Below 26000 opens 25800Primary support 26000Primary objective is 3460020 Day VWAP bullish, 5 Day VWAP bearish
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Daily Market Outlook, May 30 , 2023
