A look at the day ahead in European and global markets from Kevin Buckland
You didn't think it would be that easy, did you?
Investors are on edge after equities and the dollar got knocked back Friday, when Republican negotiators unexpectedly walked out of debt ceiling talks.
Discussions now seem to be back on track, with President Joe Biden due to meet House Republican Speaker Kevin McCarthy later today. But the brinkmanship highlights that as long as there is no deal, the potential for a disastrous U.S. default is impossible to ignore.
Time is running out, with less than two weeks before the ostensible "X-date" for the Treasury to run out of money in early June.
The dollar was heavy in Asia, and equities around most of the region declined, portending weakness when Europe wakes up as well.
A notable exception was China, with stocks gaining on the mainland and in Hong Kong, where the Hang Seng bounced from a two-month trough.
One reason: the mood music out of the weekend G-7 summit was much gentler on Chinese ears than some feared, expressing a desire to "de-risk, not decouple" on economic ties to China.
At the same time, though, China stepped up its dispute with the U.S. over chip technology, failing Micron (NASDAQ:MU) Technologies products in a security review.
Another potential boost comes from the PBOC's assessment that the fundamentals of China's economic stability and long-term improvement have not changed.
Europe's macro calendar is fairly light today, although ECB officials may want to keep an eye on euro-area consumer confidence figures for this month, following its aggressive monetary tightening campaign. Central bank chief Christine Lagarde sent a clear hawkish signal on Friday, telling policy makers to "buckle up".
Luis de Guindos and Philip Lane are among Lagarde's ECB colleagues on speaking duty today.
In the U.S., Monday's Fed speakers include James Bullard, Raphael Bostic and Tom Barkin - though they risk being drowned out by Chair Jay Powell's comments from Friday that his preference is to pause next month, instead of hike.
Key developments that could influence markets on Monday:
Eurozone consumer confidence report
ECB's Luis de Guindos and Philip Lane speaking
Fed's Bullard, Bostic and Barkin speaking