FOREX
The US dollar index, a measure of the performance of the greenback in relation to a basket of other major currencies, touched a two-and-a-half-month high this morning. The agreement established between Democrats and Republicans to temporarily remove the debt ceiling and cap some federal spending led to a massive sigh of relief not just in the US but also elsewhere, as the alternative scenario would have led to a crisis with unpredictable consequences. With the debt ceiling issue appearing to be resolved, the focus has once again shifted to less urgent but equally important issues. Inflation remains above ideal levels and some senior Fed officials have recently raised the possibility of further interest rate hikes, which may come as early as next month. Between now and then, investors will keep a close eye on the release of new jobs data on Friday. Should the figures read high, then a June rate hike will become more likely and further dollar strength can be expected.
Ricardo Evangelista – Senior Analyst, ActivTrades
Source: ActivTrader
EUROPEAN SHARES
Equities opened mixed in Europe on Tuesday, as market sentiment slowly improves amid progress toward the US debt-ceiling negotiations.
The agreement reached between President Biden and House Speaker Kevin McCarthy to temporarily suspend the US debt ceiling, provided some relief to stocks, protecting benchmarks from further declines.
While this may temporarily end the stress felt on riskier assets such as stocks, investors are likely to remain cautious for some time as the agreement still needs to go through Congress.
Today’s picture remains mixed, with the German DAX-40 index on the rise while the French CAC-40 benchmarks edge lower. Poor performances from healthcare, consumer non-cyclical and energy shares are being offset by gains in tech, utilities and real estate sectors.
Market volatility is expected to remain elevated until a final agreement on the US debt ceiling is confirmed.
Pierre Veyret– Technical analyst, ActivTrades
Source: ActivTrader
The information provided does not constitute investment research. The material has not been prepared in accordance with the legal requirements designed to promote the independence of investment research and as such is to be considered to be a marketing communication.
All information has been prepared by ActivTrades (“AT”). The information does not contain a record of AT’s prices, or an offer of or solicitation for a transaction in any financial instrument. No representation or warranty is given as to the accuracy or completeness of this information.
Any material provided does not have regard to the specific investment objective and financial situation of any person who may receive it. Past performance is not a reliable indicator of future performance. AT provides an execution-only service. Consequently, any person acting on the information provided does so at their own risk.