China data and U.S. debt ceiling impair markets. On Friday, investors worried about weak Chinese economic statistics, U.S. government budgets, and interest rates. As U.S. and Chinese economic worries resurfaced, oil prices fell for a fourth week.

Investors anticipated that overnight data reflecting a weakening U.S. economy would cause the Fed to suspend rate hikes, keeping the dollar near a one-week high.

Britain’s economy expanded in the year’s first three months, avoiding a late 2022 recession, but recovery is shaky.

This week, the MSCI All Country stock index (.MIWD00000PUS) was flat. However, as Richemont shares touched a record high on robust demand in Asia Pacific, the STOXX (.STOXX) index of 600 European businesses rose 0.4%, making it marginally higher for the week.

“It feels markets are uncertain over whether we are going into a sustained or temporary economic slowdown, so we are stuck in a bit of a twilight zone,” said CMC Markets chief markets strategist Mike Hewson.

Analysts said investors are looking for reasons to break out of ranges in stocks, oil, currencies, and bonds as a largely good earnings season winds down and big central bank rate-setting meetings are a few weeks away.

After U.S. shares dipped on Thursday on news that PacWest (PACW.O) had a deposit reduction, Nasdaq and S&P 500 futures rose.

After the FDIC stated big banks would pay to replenish their deposit insurance fund after recent bank failures, big bank shares fell.

“We have had an aggressively sideways moving market and people are looking for something to give it direction,” said Hong Kong-based Toscafund asset management chief investment officer Mark Tinker.

The IMF warned that a U.S. default would have “serious repercussions” for the economy, postponing a Friday meeting between President Joe Biden and top lawmakers to early next week.

“We have a lot of things to trip over in the next six months and that is why people are not committing to buying,” Tinker said, citing the U.S. debt ceiling deadlock, the June termination of Libor interest rates, and the Ukraine crisis.

However, Thursday’s U.S. statistics bolstered expectations that the Federal Reserve will suspend rate hikes at its June policy meeting, with futures markets pricing in a 78 basis point reduction by year’s end.

China’s economic recovery appears to be losing steam, with new bank loans falling in April, consumer prices rising at the slowest pace in more than two years, and imports unexpectedly decreasing, causing copper, iron ore, and oil prices to fall.

China’s blue chips (.CSI300) lost 1.3% and looked set to lose 1.7% for the week, while Hong Kong stocks (.HSI) fell 0.5%.

MSCI’s broadest Asia-Pacific share index outside Japan (.MIAPJ0000PUS) lost 0.6% and was heading for a 1.2% weekly decline.

The Nikkei (.N225) rose 0.9% to its highest level since November 2021 as investors hailed earnings season announcements of higher shareholder rewards.

Safe-haven flows helped the U.S. dollar hang onto tiny gains versus a basket of currencies amid growth and banking worries.

The Sterling stayed unchanged at $1.2523, while the euro fell to $1.091.

Treasury rates were unchanged on the day, with benchmark 10-year notes at 3.3973% and two-year notes at 3.8931%.

Oil will decrease for a fourth week. U.S. crude futures fell 0.4% to $70.56, while Brent crude fell 0.5% to $74.60.