Stocks recover ahead of holiday weekend

Joshua Mahony MSTA Scope Markets

Stock markets recovered on Friday as traders cashed in profits on their recent shorts and as talks between President Joe Biden and House Speaker Kevin McCarthy appear to be inching closer, says Axel Rudolph, Senior Market Analyst at online trading platform IG.

Can a US debt ceiling agreement be reached in time?

“With US Democrats and Republicans squabbling over the last $70 billion, investors increasingly hope for a signed debt ceiling agreement before 1 June. The question is whether it'll be made in time as Congress breaks up for a holiday weekend? With UK and several European countries also enjoying a prolonged weekend, investors squared their positions on Friday, leading to a short squeeze and positive close on the day.”

US data points towards further Fed rate hike in June

“Stronger US data over the past couple of days, and a higher reading of the Fed's preferred PCE inflation gauge as well as stronger-than-expected personal spending, led to a rise in the probability of another rate hike being seen in June. According to the CME FedWatch tool, 44.3% of investors expect the fed funds rate to rise to between 5.00% to 5.25% in June and 55.7% to 5.25% to 5.50%.”

Author

Joshua Mahony MSTA

Scope Markets

Joshua Mahony is Chief Markets Analyst at Scope Markets. Joshua has a particular focus on macro-economics and technical analysis, built up over his 11 years of experience as a market analyst across three brokers.

EUR/USD keeps the rangebound trade near 1.1850

EUR/USD is still under pressure, drifting back towards the 1.1850 area as Monday’s session draws to a close. The modest decline in spot comes as the US Dollar picks up a bit of support, while thin liquidity and muted volatility, thanks to the US market holiday, are exaggerating price swings and keeping trading conditions choppy.

GBP/USD flirts with daily lows near 1.3630

GBP/USD has quickly given back Friday’s solid gains, turning lower at the start of the week and drifting back towards the 1.3630 area. The focus now shifts squarely to Tuesday’s UK labour market report, which is likely to keep the quid firmly in the spotlight and could set the tone for Cable’s next move.

Gold battle around $5,000 continues

Gold is giving back part of Friday’s sharp rebound, deflating below the key $5,000 mark per troy ounce as the new week gets underway. Modest gains in the US Dollar are keeping the metal in check, while thin trading conditions, due to the Presidents Day holiday in the US, are adding to the choppy and hesitant tone across markets.

AI Crypto Update: Bittensor eyes breakout as AI tokens falter

The artificial intelligence (AI) cryptocurrency segment is witnessing heightened volatility, with top tokens such as Near Protocol (NEAR) struggling to gain traction amid the persistent decline in January and February.

The week ahead: Key inflation readings and why the AI trade could be overdone

It is likely to be a quiet start to the week, with US markets closed on Monday for Presidents Day. European markets are higher across the board and gold is clinging to the $5,000 level after the tamer than expected CPI report in the US reduced haven flows to precious metals.

XRP steadies in narrow range as fund inflows, futures interest rise

Ripple is trading in a narrow range between $1.45 (immediate support) and $1.50 (resistance) at the time of writing on Monday. The remittance token extended its recovery last week, peaking at $1.67 on Sunday from the weekly open at $1.43.