- Market sentiment improves as US Republican-controlled House of Representatives support the measures to avoid government default.
- Easing fears of hawkish Fed actions, mixed US data also allow optimists to return to the table.
- S&P500 Futures snap three-day downtrend, yields seesaw at weekly low.
- US ADP Employment Change, PMI data in focus ahead of Senate voting on debt-ceiling deal, Friday’s NFP.
Risk appetite solidifies on early Thursday as the US policymakers manage to inch closer to avoiding the ‘catastrophic’ default. Adding strength to the cautious optimism are the recently mixed US data and receding hawkish hopes from the Federal Reserve (Fed). It’s worth noting, however, that the anxiety ahead of the top-tier US employment and activity data, as well as before the Senate voting on the bill to extend the US debt-ceiling, seem to prod the optimists of late.
While portraying the mood, S&P500 Futures print the first daily gains in four while approaching the 4,200 round figure, up 0.05% intraday near 4,194 at the latest. On the same line, the US 10-year and two-year Treasury bond yields also stabilize around 3.65% and 4.42% after refreshing the weekly low during the previous fall.
“The Republican-controlled House voted 314-117 to send the legislation to the Senate, which must enact the measure and get it to President Joe Biden's desk before a Monday deadline, when the federal government is expected to run out of money to pay its bills,” said Reuters.
On the other hand, Wall Street Journal’s (WSJ) Nick Timiraos cites multiple Fed speakers and recently mixed US data to suggest that the Federal Open Market Committee (FOMC) is likely to hold interest rates steady in June.
That said, US JOLTS Job Openings rose to 10.103M in April versus 9.375M expected and 9.745M prior whereas Chicago Purchasing Managers’ Index dropped to 40.4 for May from 48.6 prior and 47.0 market forecasts. Earlier in the week, the US consumer sentiment gauge improved but the details were unimpressive.
Among the key Fed speakers was Governor Michelle Bowman who cited recovery in the residential real estate market while also adding, “The leveling out of home prices will have implications for the Fed's fight to lower inflation,” per Reuters. Before him, Cleveland Fed President Loretta Mester suggested that the Fed must go for a rate hike in June. Additionally, Fed Governor and vice chair nominee Philip Jefferson said that skipping a rate hike would allow the Fed "to see more data before making decisions about the extent of additional policy firming,” per Reuters. On the same line was Federal Reserve Bank of Philadelphia President Patrick Harker who also said on Wednesday that he is inclined to support a "skip" in interest rate hikes at the central bank's next meeting in June.
Looking forward, the market players will keep their eyes on the Senate’s voting on the debt ceiling bills and the US ADP Employment Change, ISM Manufacturing PMI and S&P Global PMIs for May for clear directions.
Also read: Forex Today: Dollar loses momentum, markets remain cautious
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

AUD/USD bears pause for a breather ahead of US PCE data
AUD/USD touched a nearly four-week low on Friday, though it lacks follow-through as traders opt to wait for the release of the US PCE Price Index later during the US session. The crucial US inflation data could offer cues about the Fed's rate-cut path and drive the USD.

USD/JPY flat-lines below 150.00 after softer Tokyo CPI print
USD/JPY holds steady near the top end of its weekly range following the release of softer-than-expected Tokyo CPI, though it struggles to find acceptance above the 150.00 mark. The BoJ's rate-hike plan, along with a weaker risk tone, underpins the safe-haven JPY and caps the pair amid subdued USD price action.

Gold price hangs near two-week low; US PCE data awaited
Gold price languishes near a two-week low touched on Thursday as traders await the release of the US PCE Price Index for cues about the Fed's rate-cut path. The crucial inflation data will influence the USD and provide a fresh directional impetus to the non-yielding yellow metal.

SEC clarifies meme coins do not fall under federal securities laws
The Securities & Exchange Commission released an official statement on its website on Thursday, clarifying that meme coins are not subject to federal securities laws.

February inflation: Sharp drop expected in France, stability in the rest of the Eurozone
Inflation has probably eased in February, particularly in France due to the marked cut in the regulated electricity price. However, this overall movement masks divergent trends. Although disinflation is becoming more widespread, prices continue to rise rapidly in services, in France as well as elsewhere in the Eurozone.

The Best brokers to trade EUR/USD
SPONSORED Discover the top brokers for trading EUR/USD in 2025. Our list features brokers with competitive spreads, fast execution, and powerful platforms. Whether you're a beginner or an expert, find the right partner to navigate the dynamic Forex market.