Ariff Azraei

The ceiling is sky-high! The US House of Representatives narrowly passed a bill to raise the debt ceiling that includes spending cuts, but it is unlikely to pass in the Senate or be signed by President Biden. Republican House Speaker Kevin McCarthy hopes to negotiate spending cuts with Democrats, but they insist on a debt limit increase with no conditions. The House bill would increase borrowing authority by $1.5 trillion or until March 31, cut spending to 2022 levels, and cap growth at 1% a year. Although the democrats is not uncertain that the bill would not pass, the next interest hike could turn heads as interest spending on mountains of treasury bills digging into the government funds. Lower bond buying by key buyers such as China and Japan are other risks that need to be considered. If history tells any tale, it is one that the debt ceiling have no limits but the sky.
Equity suffered for the second day as a two-month-old banking crisis is resurfacing with First Republic at the centre. Although big names such as Microsoft, Google, and Chipotle rises on positive earnings, it is not enough to support the market when company like Enphase energy and Activision being hurdled with regulations.
Gold recovered Wednesday's losses on a weaker dollar. The market is now focusing on US GDP data and the Fed’s personal consumption expenditures price index ahead of next week’s Fed meeting, where a rate hike of 25 basis points is expected.
Oil prices rose slightly on Thursday after declining due to fears of a US recession and an increase in Russian oil exports. New orders for key US manufactured capital goods fell in March, likely affecting economic growth in the first quarter.
The US dollar weakened in early European trade on Thursday ahead of the release of key US growth data over banking risks, slowing economic growth, and a debt ceiling standoff. The European economy showing signs of recovery and the central bank is likely to continue hiking rates into the summer.

Visit our website: https://goldenbrokers.my/en/daily-market-news-585