Here is what you need to know on Tuesday, May 23:
Following Monday's choppy action, financial markets stay relatively quiet early Tuesday as investors await S&P Global PMI surveys for the Eurozone, the UK and the US. Market participants will continue to keep a close eye on headlines surrounding the debt-limit talks and comments from central bank officials.
US President Joe Biden and House Speaker Kevin McCarthy failed to reach an agreement on raising the government's $31.4 trillion debt ceiling ahead of the estimated June 1 deadline. In a statement released following the meeting, "we reiterated once again that default is off the table and the only way to move forward is in good faith toward a bipartisan agreement," Biden said. The sides are expected to continue talks over the phone throughout this week.
US stock index futures trade virtually unchanged on the day and the benchmark 10-year US Treasury bond yield holds steady above 3.7%. In the meantime, the US Dollar Index (DXY) fluctuates in a tight channel slightly below 103.50. In addition to S&P Global PMIs, the US economic docket will also feature April New Home Sales and Richmond Fed Manufacturing Index for May.
EUR/USD struggles to stage a recovery and continues to trade at around 1.0800 early Tuesday. The data from Germany showed in the European morning that the HCOB Manufacturing PMI dropped to 42.9 in May from 44.5 in April, revealing that the business activity in the manufacturing sector continued to contract at an accelerating pace.
GBP/USD stays under modest bearish pressure and edges lower toward 1.2400. Bank of England Governor (BoE) Andrew Bailey and other policymakers will be testifying before the UK Treasury Select Committee from 0915 GMT.
USD/JPY climbed toward 139.00 and touched its highest level since November during the Asian trading hours on Tuesday before staging a downward correction. As of writing, USD/JPY was trading flat on the day near 138.50. Earlier in the day, the data from Japan revealed that Jibun Bank Manufacturing PMI and Jibun Bank Services PMI improved to 50.8 and 56.3 in May, respectively.
Gold price turned south amid rising US Treasury bond yields and closed the day in negative territory. XAU/USD continues to stretch lower early Tuesday and was last seen losing nearly 1% on a daily basis below $1,960.
Following Monday's indecisive action, Bitcoin gained traction early Tuesday and climbed toward $27,300. Ethereum broke out of its two-week old horizontal channel and was last seen rising 2% on the day at $1,850.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD stays in positive territory above 1.0850 after US data
EUR/USD clings to modest daily gains above 1.0850 in the second half of the day on Friday. The improving risk mood makes it difficult for the US Dollar to hold its ground after PCE inflation data, helping the pair edge higher ahead of the weekend.
GBP/USD stabilizes above 1.2850 as risk mood improves
GBP/USD maintains recovery momentum and fluctuates above 1.2850 in the American session on Friday. The positive shift seen in risk mood doesn't allow the US Dollar to preserve its strength and supports the pair.
Gold rebounds above $2,380 as US yields stretch lower
Following a quiet European session, Gold gathers bullish momentum and trades decisively higher on the day above $2,380. The benchmark 10-year US Treasury bond yield loses more than 1% on the day after US PCE inflation data, fuelling XAU/USD's upside.
Avalanche price sets for a rally following retest of key support level
Avalanche (AVAX) price bounced off the $26.34 support level to trade at $27.95 as of Friday. Growing on-chain development activity indicates a potential bullish move in the coming days.
The election, Trump's Dollar policy, and the future of the Yen
After an assassination attempt on former President Donald Trump and drop out of President Biden, Kamala Harris has been endorsed as the Democratic candidate to compete against Trump in the upcoming November US presidential election.