US debt ceiling theater: final act? | MarketTalk: What’s up today? | Swissquote

Show notes

Risk sentiment remains poor as the US couldn’t reached an agreement on its debt ceiling.
But House Speaker McCarthy hinted that an agreement is possible within days.
Yesterday, both equities and bonds were sold off on US debt ceiling impasse, while the US dollar index remained capped at two-week highs.
On the data front, disappointing Home Depot results, mixed retail sales and better-than-expected industrial data didn’t change the Fed pause expectation for June.

However, the weak Chinese data from earlier this week, combined to German pessimism and a 3.7 mio barrel build in US inventories kept crude oil under decent selling pressure.
Global risk sentiment for the next few days will be driven by the US debt ceiling theater. While the looming uncertainty makes the markets hard to navigate in the short run, there is a good chance that the drama comes to an end within the next few days. In this scenario, we shall see a relief rally across risk assets. And a relief rally could be further boosted by the fact that the market is extremely bearish right now – which means there is potential for a sizeable recovery despite rising recession odds and a gloomy economic outlook.
Listen to find out more!