The JPY is the strongest of the major currencies, while the AUD is the weakest. The USD – which was the weakest of the majors at the start of the day – recovered modestly in the US session, but remains mostly lower thanks largely to declines vs the GBP (-0.54%) and the JPY (-0.68%). The greenback closed marginally higher vs the CHF, AUD and NZD (between 0.07% and 0.12%)

In economic news today:

• The Dallas Fed Manufacturing Index for May 2023 was reported at -29.1, deteriorating from the previous value of -23.4. Key indicators such as new orders and the growth rate of orders hitting their lowest since mid-2020. Output also declined slightly, reflecting stagnation in factory activity. However, the labor market showed signs of resilience with steady employment growth, and future production index also suggested a possible rebound.
• The US Consumer Confidence Index for May 2023 outperformed expectations, posting a score of 102.3 against a forecasted 99.0. This is a slight decrease from the revised prior figure of 103.7 but still indicates a positive outlook from consumers. The Present Situation Index, which measures consumers’ views of current market conditions, saw a slight dip to 148.6 from 151.8. The Expectations Index, which gauges the short-term outlook for income, business, and labor market conditions, also saw a marginal decline to 71.5 from 71.7.
• The March 2023 Case-Shiller 20-city home price index indicated a month-on-month increase of 0.5%, surpassing the expected 0.0%. This data suggests that the real estate market in these 20 cities is strengthening, representing an improvement from the prior +0.1% year-on-year figure. However, despite this monthly growth, the index saw a year-on-year decrease of 1.1%, which was less severe than the anticipated -1.6% drop.

Federal Reserve’s Barkin spoke today and expressed hope that interest rates could stay at a ‘neutral, normal’ level for a sustained period, which he deems beneficial for the economy. He acknowledged that the economy is showing mixed signals, with some parts cooling while others remain vibrant. He noted that many businesses are attempting to raise prices and will continue to do so until demand falls. Barkin predicted that inflation would be more stubborn “than many people would hope”, and that he has been hearing less about the risk from wage increases. He further added that bank loan volumes have remained stable, even as banks have become more selective. In response to Barkin’s comments, U.S. Treasury securities showed marginal strength (lower yields), while the pricing for a 25bps rate hike in June has remained largely unchanged, still implied above 60%.

Now that the debt ceiling agreement was hashed out over the weekend, the focus turned to the horse-jockeying for the votes needed to pass the deal. Of course, the conversation on the debt ceiling among US Congressional leaders and the White House is marked by diverse perspectives. The White House Budget Director, asserting that the x-date is unlikely to be postponed, has called for congressional action by June 5th to increase the debt ceiling. The sentiment was echoed by US Deputy Treasury Secretary Adeyemo, who termed the deal a “good faith compromise” to avert debt default. Senate Majority Leader Schumer has pledged support for the deal, promising a prompt vote, while House Democratic Leader Jeffries reassured that House Democrats will strive to ensure the bill’s passage. However, some discord was evident, with Representative Jayapal indicating that Republicans did not win significant concessions on spending in the debt deal, and raising concerns about certain provisions. Despite this, House Speaker McCarthy and Republican Debt Negotiator McHenry expressed confidence in Republican support for the bill. In contrast, voices of dissent were clear from Representative Dan Bishop and the House Freedom Caucus, with the former advocating for a motion to oust McCarthy over the debt deal, and the latter denouncing the agreement outright. Representatives Norman, Hunt, and Mace all voiced their intention to vote against the debt ceiling bill. Despite the discord, the deal is expected to pass.

Crude oil prices moved sharply lower today. The price of WTI crude fell below the $70 mark as economic fears in China’s underlying economy and problematic debt load are causing concerns about future oil demand. Data from GasBuddy revealed that US gasoline demand over the Memorial Day weekend was down 1.1% from 2022, suggesting a weak start to the summer driving season. OPEC’s JMMC will meet on June 4, but any significant action from the meeting is viewed as a long shot, especially after Russia downplayed the potential for action, triggering a wave of selling last week. Crude oil prices are trading down $-2.89 or -3.96% at $69.79.

On the closing day, there was mixed movement in the markets. The Dow Jones Industrial Average (DJI) dipped slightly by 0.15%, settling at 33042.79. The S&P 500 (SPX) remained largely steady, showing virtually no change to close at 4205.53. Conversely, the tech-heavy Nasdaq (IXIC) showed a slight upward movement, rising 0.32% to reach 13017.42 but closed off the high at 13154.29.

In terms of individual stocks:

• Nvidia (NVDA) had a strong performance, rising 2.99% to close at 401.11.
• Microsoft (MSFT) saw a small decrease of 0.50%, settling at 331.21.
• Intel (INTC) showed significant growth, rising 3.41% to close at 29.99.
• Apple (AAPL) also made gains, increasing by 1.11% to reach a closing price of 177.31.
• Meta Platforms (META), formerly Facebook, showed a slight increase of 0.18% to close at 262.52.
• Amazon (AMZN) closed at 121.61, a rise of 1.32%.
• Costco (COST) made modest gains of 0.15% to settle at 508.03.

European equity markets closed with mixed performances today, while US equities rallied. The Stoxx 600 and the German DAX each dropped by 0.3%, indicating moderate losses. More significant declines were observed in the UK’s FTSE 100 and the French CAC, both falling by 1.4%. On the other hand, Italy’s MIB and Spain’s IBEX indices saw marginal decreases, each slipping by 0.2%. In the US market

In the US debt market, yields are sharply lower with the snapshot showing:

• 2-year yield 4.462% -12.7 basis points
• 5-year note 3.815% -13.5 basis points
• 10-year note 3.694% -12.6 basis points
• 30-year bond 3.895% -8.1 basis points

In other markets:

• Gold is trading at $15.56 or 0.80% at $1959.42. Last week the price moved down by -3.17%
• Silver is trading up 5.6 cents or 0.24% at $23.18
• Bitcoin which traded just above the $28,000 level at the start of the US trading day has retraced back down to $27,814

Thank you for your support. Good fortune with your trading in the new day.

MoneyMaker FX EA Trading Robot