15.05.202313:09 Forex Analysis & Reviews: US premarket on May 15, 2023: politicians must reach agreement

US stock index futures rose sharply on Monday, boosted by investor confidence that US lawmakers would be able to reach a consensus and resolve the looming debt ceiling crisis. Over the weekend, President Joe Biden expressed optimism that an agreement could be reached within the week, announcing a meeting with Republicans to be held on Tuesday. The budget discussion that was slated for Friday was delayed.

S&P 500 futures saw a 0.4% rise, bouncing back after Friday's downturn. The NASDAQ was also on an upward trend, posting a more than 0.6% gain, while the Dow Jones Industrial Average had a modest 0.3% increase. In European markets, mining stocks were in the lead.

The US debt ceiling continues to be the main concern for investors. Numerous economists, industry experts, and American politicians has raised alarms about a potential market upheaval and economic calamity should Republicans and Democrats fail to agree on raising the government borrowing limit, currently set at $31.4 trillion. Joe Biden, House Speaker Kevin McCarthy, and other key Congressional figures are set to hold further discussions on the matter on Tuesday.

President Biden, who declared his re-election bid late last month, recently voiced his belief that a near-term compromise is possible. The president has not shared details about the specific terms of negotiations. "I remain optimistic because I'm a congenital optimist. But I really think there's a desire on their part as well as ours to reach an agreement and I think we'll be able to do it," he told reporters on Sunday.

Nonetheless, the risk appetite of investors remains muted, as the stand-off in Washington, DC is merely one of numerous risks keeping investors away from the market. Other significant concerns include persistently high inflation, the potential start of a recession, and systemic vulnerabilities of the US banking sector.

In international news, the Turkish lira decreased as the outcome of the presidential election, which is headed for a runoff, left the nation's leadership future uncertain. The Thai baht, on the other hand, gained ground as pro-democratic parties emerged victorious at the elections last weekend.

Technical analysis suggests demand for S&P 500 will continue, with potential for continued bullish trend development. The key goal for bulls will be to keep the index above $4,116 and regain $4,150. This would open the way towards $4,184. Bulls will also have to hold on to $4,208, which would solidify the new bull market. However, in the face of dwindling demand and persistent inflation risks, any downward movement would require buyers to assert their presence around $4,116. A breakout below that level could lead to a swift pullback to $4,091, paving the way towards $4,064.