A month of dollar strength. There is an agreement that no one wanted

Republican Party leaders and the White House have reached an agreement that neither side is satisfied with. The deal imposes new spending limits for two years, but raises the national debt limit for the same period. The agreement reached on Saturday has yet to be ratified by both houses of Congress, an intricate process that will depend on centrists from both parties. McCarthy's margin for error is slim, and his party's lawmakers can still revolt, forcing negotiators back to the table, which could cost him his job or lead the country to a default that could shake the global financial system and jeopardize US credibility. The announced deal avoids new taxes and limits spending growth by keeping non-defence spending in 2024. This is the most important budget agreement limiting the deficit for almost a dozen years. Raising the debt limit allows the Treasury to issue new debt to pay for expenses that Congress has already approved.

The deal reached may improve sentiment in the markets, especially as US investors went on a long Memorial Day weekend. It is an unspoken rule that when US players celebrate, not much happens in the markets. Stock markets in the US are closed today, and trading in futures on US indices is shortened to 19:XNUMX p.m. XNUMX. The market for bonds and agricultural commodities is also closed. Trade in industrial raw materials has been shortened.

A month of dollar strength

All indicates that CMCUSD Index will end the month with a big gain, as a result of which industrial metals lost. Silver is trying to return above $23 an ounce and copper is at its lowest in more than six months, despite the metal rebounding since Friday. Gold also lost value. An ounce of gold fell below $1950 and is trading at $1945 this morning.

Deterioration of moods in Europe. A slight rebound on Wall Street

When the fate of the debt limit was in the balance before the long weekend in the US, investors were reluctant to look at stocks, but Friday's session on the main European stock exchanges ended in green, hoping for an agreement between the GOP and the White House. The record-breaking Dax (1,02%) was recovering after several falling sessions. Other leading benchmarks gained from 0,74% (FTSE100) to 1,24% (CAC40).

Overseas, the Dow Jones, after five consecutive declines, this time increased by 329 points, or 1%. The rise in AI stocks fueled the S&P500, which gained 1,30% and again reached the key resistance at 4200 points. The Nasdaq Composite, which is running away from the bear market, also benefited from the technology and rose for the second session in a row, this time by 2,19%.

There was moderate optimism in Asia

Asian markets are seeing an improvement in sentiment today after McCarthy and Biden struck a deal that will remove the specter of delays in meeting US financial obligations. The stock exchanges are rising in line with the increases in the US and Europe. Still the brightest spot in the region is the Nikkei 225, which has already broken new records. Keep in mind that Japanese stocks have made gains with much less volatility than US tech stocks. This means that they should still look attractive to American investors. The Tokyo stock index gained 0,58% and the Australian S&P/ASX 200 gained 1,02%. The Seoul Stock Exchange is closed today. On the other stock exchanges: Hong Kong (-0,15%), Shanghai (0,47%), Singapore (0,04%), Sensex (0,75%). The Asia Dow gained 0,97%.

Summary of the session on the Warsaw Stock Exchange

When before the last session of the week it was clear that the optimism had faded and the WIG20 and the broad market were ready to deepen the correction, but Friday brought relief to the Warsaw bulls. The solid growth on the WSE was partly due to improved moods on stock exchanges in Asia, Europe and the USA. Technology came into play again. After WIG20 reached above 20 points at the beginning of the week, a slight correction could be expected, but not a sell-off, where the benchmark fell to around 2000 points, i.e. the support zone. Friday's session on the WSE was in a different mood, followed by the main stock exchanges first in Asia, then the Old Continent and finally on Wall Street. Is the agreement between the Republicans and the White House on the debt limit of the world's largest economy the end of the problems of bullish players? We'll find out soon as markets begin to price in its impact on the bond market. We also have to remember that Friday's data on inflation in the US did not turn out well Fedand at the June meeting FOMC we can hear the hawkish tone again. Data on the condition of the US labor market will be of great importance for risky assets. The entire past week showed a balance of demand and supply, ending in the middle of the fluctuation range between support and the highest level this year.

If, which cannot be ruled out, weak sentiment prevails on Wall Street and the main stock exchanges of the Old Continent, the way north may be difficult. Psychological level 2000 pts. could have been a profit-taking opportunity, and if so, demand would hardly be expected to return the day after the sell-off, threatening further declines in blue-chip stocks.

Trade was accompanied by a turnover which amounted to PLN 1,02 billion on the broad market. The WIG gained 1,75 and the blue chip index added 2,21%. The WIG20 contract increased by 2,3%, ending at 1998 points. Medium and small companies also performed well. mWIG40 gained 0,90 and sWIG80 increased by 0,44%.