By ForexTime
Despite the holiday-shortened week ahead for US and UK financial markets, the US debt ceiling saga will remain centre stage as the clock ticks towards a potential June 1st “hard deadline”.
On top of this, traders will be dished up a series of top-tier economic data including the NFP, which could trigger more market volatility:
Monday, May 29
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The US debt ceiling negotiations have certainly held markets captive. A sense of tensions is set to grip global financial markets ahead of Treasury Janet Secretary Yellen’s June 1st “hard deadline” for raising the US debt ceiling.
While there have been recent reports of US negotiators moving closer to striking a deal, this is not the first time such headlines have boosted sentiment only to be followed by disappointment.
On the data front, the US May non-farm payroll report on Friday could offer major clues on the Fed’s next move. The US economy is expected to have created 180,000 jobs in May, a noticeable decline from the 253,000 jobs in March. The unemployment rate is forecast to tick higher to 3.5% while average hourly earnings are expected to rise 4.3% year-on-year. Ultimately, signs of cooling labour markets may support expectations around the Fed cutting interest rates later this year.
With the clock ticking on the US debt ceiling and key data due in the week ahead, here are 3 potential trading opportunities:
The potent combination of heavy-risk events could result in heightened volatility for the US Dollar Index.
There is a possibility that the US debt ceiling developments overshadow key economic data including the NFP on Friday.
After bouncing within a range for the past 2 months, could the S&P 500 experience a breakout in the week ahead?
It has felt like the same old story for the SPX500_m as prices traded within a wide range on the daily charts. Support can be found at 4050 and resistance at 4200.
It may be wise to fasten your seatbelts because gold could see heightened volatility in the week ahead.
The precious metal is heading for its third weekly loss amid growing expectations around the Federal Reserve keeping rates higher for longer. Given the slate of US economic data and heavy risk events in the week ahead, gold could be placed on a rollercoaster ride.
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