Markets have had a relatively quiet session to get the week underway, highlighted by a real lack of top-tier data.

We are in the midst of earnings season in the US and that is seeing some volatility in individual names, but overall the main indices such as the SPX are still looking at the larger macro themes.

Today, President Trump announced a deal to suspend the debt ceiling until July 31, 2021, effectively kicking the can along the road, which is the preferred strategy for the US Government at the moment. Nevertheless, the SPX closed higher on the day and is not quite back to record highs just yet.

At the same time, the USD is holding above 97.00 on the US Dollar Index and pushed a little higher overnight. We are really still in that holding pattern ahead of the FOMC at the end of the month.

GOLD was largely unchanged, but the interesting one of the day (or uninteresting) was the EUR/USD that was really stuck in a tight range and simply couldn’t get moving. It, of course, is holding ahead of the ECB later this week. While we expect no change in rates, there is talk of a deposit rate cut later this year.

BTC weakened yesterday as well and is now back looking at a test of $10,000. All the momentum has now slowed down after the big run into $14,000 and we are now seeing that period of volatility contraction.

Asian Market Outlook

It is another very thin day on the data front in Asia and the only notable event is happening right now, with the RBA’s Kent speaking in Sydney.

The key points he has made are that he expected the AUD might have been higher without the recent rate cuts and also he feels Australia is a very long way from QE. Not that it has ever really been on the agenda. The AUD/USD  is virtually unchanged on the day and not responding to any of the headlines here.

It is a very quiet calendar in Asia this week all round and I expect most of the moves will be based on the USD.