Just days before the June 5 deadline, last night the House of Representatives passed the debt ceiling raising bill. The stock markets could today breathe first.
After yesterday’s significant minus, it looks like a counter-movement before the market. The DAX is currently trading at 15,731 points, about 0.6% above Wednesday’s closing price.
Now it’s up to the Senate
The debt ceiling raising bill, the Fiscal Responsibility Act, passed last night by a vote of 314 to 117 from both Democrats and Republicans. It now has to be approved by the Senate. Senate Majority Leader Chuck Schumer expressed confidence that the lower house of Congress will also approve the bill before the deadline. A big chunk should fall from the hearts of investors.
Interest rate break in June possible
Another negative factor is the prospect of further interest rate hikes in the USA. However, the Beige Book published yesterday signals a pause in interest rates. Above all, the economic outlook seems to be clouding over. This alone could prompt Jerome Powell to put the brakes on interest rates. According to the CME Group, 61% of the market participants surveyed now expect interest rates to pause. A day earlier, the majority was expecting yet another rate hike at the next FOMC meeting on June 14th.
All eyes are on the jobs report
Another highlight is scheduled for tomorrow, Friday, namely the official US job market report. Above all, the robust labor market has long been a thorn in the side of the Federal Reserve. Non-farm employment is expected to decline at the moment. A slowdown in wage growth would also be helpful.
DAX 40 – Cross support has to fix it
Key cross support was reached yesterday as a result of weakness. This consists of the rising 55-day simple moving average currently at 15,724 points and the well-known March high at 15,709 points. The mentioned chart marks should today be recovered on a closing price basis. In this case, it could then go back towards the psychological mark at 16,000 points.