Summary:
U.S. stocks slouched to a higher close on Monday, and benchmark Treasury yields rose amid flickering optimism that Washington will get past partisan wrangling and reach a debt ceiling deal.
U.S. stocks slouched to a higher close on Monday, and benchmark Treasury
yields rose amid flickering optimism that Washington will get past partisan
wrangling and reach a debt ceiling deal.
The greenback backed down after touching a five-week high, consolidating gains. Gold edged higher in opposition to the weakening dollar.
Oil prices rose a dollar a barrel on Monday. At least 300,000 barrels of oil equivalent per day production was shut in last week in Alberta.
Commodities
U.S. oil output from the seven biggest shale basins is due to rise by 41,000 bpd in June to the highest on record, data from the EIA showed on Monday.
‘If credit conditions ease over the coming months, allaying economic fears for the world's largest economy, oil prices could bounce back without assistance but it seems a little premature at this point,’ said OANDA analyst Craig Erlam.
Forex
President Joe Biden is scheduled to meet with congressional leaders on Tuesday for face-to-face talks, a day before he leaves for a meeting of the Group of Seven nations in Japan.
Though the two sides did not appear close to an agreement, the White House has not ruled out the annual spending caps that Republicans say must accompany any increase in the nation's $31.4 trillion debt limit.
In emerging markets, the Turkish lira sank to a near record low as weekend elections looked headed for a runoff.
‘The market is in consolidation mode and waiting for clearer signals from Washington on how they're going to avert a U.S. default,’ said Amo Sahota, director at FX consulting firm Klarity FX in San Francisco.
‘I don't think there are key market levels that have been broken. Euro/dollar is still above $1.08. On Friday, it was threatening to drop below $1.08. The pound is still at $1.25,’ he added.
Despite the rebound in risk appetite, the Swiss franc has still risen by over 10%. Its close correlation with gold makes it a preferred safe-haven asset.
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PPI figures loom large, with the US dollar and Fed rate expectations set for a potential shift.
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Oil prices rose on Thursday, recovering from the previous session's losses, as the upcoming Trump-Putin meeting increased market risk premiums.
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