European stocks and Asian Markets wrap up. European stock futures decline; proceed with care as US debt negotiations persist
Monday’s opening of the European stock markets is anticipated to be cautious. As talks about potentially increasing the debt ceiling for the United States go on.
The DAX futures contract declined 0.1% at 2:00 ET (06:00 GMT), as did the CAC 40 index futures. And the FTSE 100 futures in the UK.
European economic activity muted today
Today’s macroeconomic schedule for Europe is rather light, with talks by Luis de Guindos and Philip Lane of the ECB. And statistics on consumer confidence for the eurozone’s May quarter as the key headliners.
In light of this, activity is probably going to be somewhat muted as traders wait for further information from Washington and talks to prevent a U.S. default. Which would have disastrous impacts on the world economy, are expected to remain.
In an effort to restart negotiations after Republican negotiators abruptly left Friday’s debt ceiling talks, President Joe Biden is scheduled to meet with House Republican Speaker Kevin McCarthy on a later Monday.
Over the weekend, U.S. Treasury Secretary Janet Yellen reiterated that June 1 is still a “important target” for lifting the federal debt ceiling. And that difficult decisions would need to be taken if Congress fails to accomplish so. The debt ceiling is now $31.4 trillion.
Over the weekend, the G7 conference in Japan provided some encouraging news. When Vice President Biden predicted that ties between the United States and China will get better “very soon.”
This may result in a resurgence of international investment in China. Assisting a significant export market as it battles with a post-COVID economic recovery.
Due to concern over the continuing U.S. debt limit negotiations, oil prices declined on Monday. Giving back some of the gains made the previous week.
Crude Oil and Gold Futures Dip. EURUSD Up
U.S. crude oil futures were trading 0.8% down at $71.09 a barrel by 2:00 ET, while the Brent price was down 0.8% at $74.95.
Last week saw a slight increase in both futures, following a month of steep drops owing to worries about China’s weakening economy., The world’s biggest oil importer, and the possible economic effects of a U.S. default.
Gold futures also decreased 0.3% to $1,976.05/oz, while the EURUSD traded 0.1% higher at 1.0814.
Asian equities fluctuated due to concerns over the debt ceiling and positive U.S.-China relations.
The majority of Asian equities were neutral on Monday as discussions to avert a default persisted. And excitement about a possible rise in bilateral ties were mostly outweighed by concern over lifting the U.S. debt ceiling.
Shanghai Shenzhen CSI 300 and Shanghai Composite indices in China increased by 0.1% and 0.4%., While the Hang Seng index increased by 1.3% due to Chinese firms listed in Hong Kong. Taiwan Weighted index decreased by 0.1 percent whereas Australia’s ASX 200 index dropped by 0.3%.
After a spectacular run over the previous 2 weeks, Japan’s Nikkei 225 and TOPIX both increased by about 0.1 percent apiece,. Staying near more than 30-year peaks. Gains, though, suddenly seemed to be losing momentum. As statistics on machine orders showed persistent weakening in Japan’s important production sector.
The markets were anticipating the creation of a fresh government after the pro-democracy party upset the existing military-backed party in elections.. Thailand’s SET Index had a 1% decline and was the poorest performance across its Asian counterparts for the day.
The US dollar dips on Fed’s softer tone on rate pricing
On Monday, the majority of Asian currencies struggled to find direction as markets await further clues on lifting the U.S. debt ceiling. Meanwhile, the dollar fell as Fed Chair Jerome Powell gave a less aggressive posture than anticipated, which caused it to lose ground.
After Powell stated on Friday that the Fed wasn’t going to have to raise interest rates by a significant amount. Due to the tighter financing circumstances in the U.S.. The currencies in the region noticed some reprieve. As a result, the dollar saw significant losses that continued into Monday’s Asian trading.
The US dollar index decreased by around 0.2%, as speculation that the Fed would stop raising interest rates in June has grown. A June hold has a roughly 83 percent possibility, according to Fed Fund futures pricing.
Asian currencies in general were a mixed bag. The less aggressive forecast for the Fed. Which helped the rate-sensitive South Korean won increase by 0.6%, and the Australian dollar increased by 0.1 percent.
The likelihood of a halt in U.S. interest rate rises helped the Japanese yen increase by 0.2%. However, the currency had suffered substantial declines during the previous two weeks. As a result of the Bank of Japan’s indication that their ultra-dovish monetary stance would not alter any time soon.
