The National Debt Ceiling to Be Raised — the Price of Bitcoin Is Growing

US President Joe Biden and top Republican Kevin McCarthy reached a tentative agreement Saturday night to suspend the federal government's USD 31.4 trillion debt ceiling, ending a months-long deadlock. Biden said that the deal is a compromise, and the parties discussing the ceiling increase will not get everything they want.

Moving Past Debt-Ceiling Woes, Bitcoin Turns Attention to Bigger Issues

Bitcoin traded as high as $28.4K at the start of Monday’s Asian session but fell back to $27.8K by the beginning of European trading. Meanwhile, the top cryptocurrency has been rising daily since the 25th, pushing back from support at $25.8K, near the 200-week moving average. This move looks like an exit for speculators. However, the market’s attention may shift to more market-heavy issues, such as slowing economic growth and high-interest rates.

New Zealand Dollar Stems Nasty Slide

New Zealand’s retail sales also contributed to last week’s woes, with retail sales contracting for a second straight quarter, as high interest rates have cooled the economy. The RBNZ is projecting that the economy will contract in the second and third quarters, which should bring down inflation, which is running at 6.7%, well above the target of 2%.

ECB's Resolve to be Tested by a Potential Downside Surprise in Inflation

Another week has just started, and it is another test for the ECB’s commitment to deliver price stability. With growth slowing down considerably, as seen at last week’s weaker business surveys, the focus turns to inflation figures. Could a mixed set of data create second thoughts at the ECB and put a (temporary?) stop to the recent euro/US dollar decline?

GBP/USD Flat in Holiday-Thinned Trading

GBP/USD has started the week quietly. The pound is currently trading at 1.2342, almost unchanged. With US markets closed for Memorial Day, I expect little movement from GDP/USD during the day.

Oil Once Again Needs to Confirm its Uptrend

WTI remains within the upward trend formed in early May. However, be prepared for another test of this trend support at $71 and a possible move lower.

Aussie Eyeing US Debt Talks and RBNZ Decision

AUD/USD kept to tight ranges last week even as market pricing for another RBA hike increased. In the week ahead, US debt negotiations will be watched each day, while on crosses, AUD/NZD is under pressure ahead of the RBNZ decision on Wednesday.

Cryptocurrencies Wait for a Signal

Cryptocurrency market capitalisation fell 2% over the week to $1.12 trillion, mostly fluctuating between $1.11 trillion and $1.14 trillion. The market is in no hurry to pick a trend, bringing the cap back into its chosen range and moving on to news of the US debt ceiling and the Fed’s next move.

A Strong Set of Business Survey Numbers Appears to Suit ECB's Intentions

With the euro experiencing a rather difficult month and confirming the various seasonality studies, this week’s data calendar has the potential to offer even more excitement. In particular, the preliminary PMI prints and the German IFO survey are expected to be closely scrutinized as certain market participants are trying to counter the elevated ECB rate hiking expectations. The euro would definitely enjoy a boost following its recent performance against both the US dollar and the pound.

Japanese Yen Drifting ahead of BOJ Core CPI

Inflation has become a hot topic for Japanese policy makers, which marks a sea-change after years of deflation. Japan is dealing with inflation of around 3%, which is much lower than in other major economies but nevertheless higher than the Bank of Japan’s 2% target.