The US avoids default

Wells Fargo Research Team Wells Fargo

Summary

United States: The US avoids default

This week, Congress and the president prevented what would have been the first default in U.S. history by agreeing to suspend the debt ceiling through the end of 2024. Despite a bewildering jobs gain that defied market expectations, data on balance continued to suggest that economic activity is slowing, albeit gradually.
Next week: ISM Services (Mon), Trade Balance (Wed)

International: Canadian growth rebounds, Eurozone inflation trends lower

The Canadian economy advanced at a 3.1% annualized rate in the first quarter of 2023, boosted by household spending and strong exports. Meanwhile, Eurozone CPI data showed that headline and core inflation slowed more than consensus expectations. The headline rate slowed to 6.1% year-over-year, while the core measure that excludes more volatile items, such as food and fuel, decelerated to 5.3%.
Next week: RBA Policy Rate & Australia GDP (Tue/Wed), BoC Policy Rate (Wed), Mexico CPI (Thu)

Credit market insights: Beige book may be flashing red lights in the future

The Federal Reserve System's latest Beige Book showed that regional economies generally chugged along with little change over April and early May, but a slowdown is evident on the horizon, with some sectors already in decline.

Topic of the week: The Mountains vs Miami: Stacking up the NBA and NHL finalists

This year's NBA and NHL finals are a mirror matchup between a top-seeded team from the Mountain West and an underdog team from Miami. Shiny hardware and eternal glory aside, how are the local economies poised to benefit from the finals festivities?

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Wells Fargo Research Team

Wells Fargo

EUR/USD hits two-day highs near 1.1820

EUR/USD picks up pace and reaches two-day tops around 1.1820 at the end of the week. The pair’s move higher comes on the back of renewed weakness in the US Dollar amid growing talk that the Fed could deliver an interest rate cut as early as March. On the docket, the flash US Consumer Sentiment improves to 57.3 in February.

GBP/USD reclaims 1.3600 and above

GBP/USD reverses two straight days of losses, surpassing the key 1.3600 yardstick on Friday. Cable’s rebound comes as the Greenback slips away from two-week highs in response to some profit-taking mood and speculation of Fed rate cuts. In addition, hawkish comments from the BoE’s Pill are also collaborating with the quid’s improvement.

Gold climbs further, focus is back to 45,000

Gold regains upside traction and surpasses the $4,900 mark per troy ounce at the end of the week, shifting its attention to the critical $5,000 region. The move reflects a shift in risk sentiment, driving flows back towards traditional safe haven assets and supporting the yellow metal.

Crypto Today: Bitcoin, Ethereum, XRP rebound amid risk-off, $2.6 billion liquidation wave

Bitcoin edges up above $65,000 at the time of writing on Friday, as dust from the recent macro-triggered sell-off settles. The leading altcoin, Ethereum, hovers above $1,900, but resistance at $2,000 caps the upside. Meanwhile, Ripple has recorded the largest intraday jump among the three assets, up over 10% to $1.35.

Three scenarios for Japanese Yen ahead of snap election

The latest polls point to a dominant win for the ruling bloc at the upcoming Japanese snap election. The larger Sanae Takaichi’s mandate, the more investors fear faster implementation of tax cuts and spending plans.

XRP rally extends as modest ETF inflows support recovery

Ripple is accelerating its recovery, trading above $1.36 at the time of writing on Friday, as investors adjust their positions following a turbulent week in the broader crypto market. The remittance token is up over 21% from its intraday low of $1.12.