Daily Report

26 de Maio de 2023
Financial Markets | daily report 26.05.2023
  • Negotiations to raise the US debt ceiling progressed over the course of Thursday, with both the Government and the opposition party suggesting talks were in a better place, though not finalised yet. Should a deal be reached soon, Parliament would have to approve it before June 1, the deadline stated by Treasury Secretary to run out of cash.
  • US stocks were buoyed by these news and by the good performance of the tech sector. Earlier in Europe, equity indices were weighed down by Wednesday pessimistic news on the debt ceiling and a US credit downgrade, and by a downward revision of Germany's Q1 GDP, which confirmed the country entered a technical recession last quarter.
  • Sovereign yields rose across the board and especially in the US, fueled by lower-than-expected unemployment claims and an upward revision to Q1 GDP. Money markets are now pricing in a 0.25 pp increase in the Fed's interest rates by July, despite Fed's Collins dovish remarks about the conveniency of a pause in the rate hiking cycle.