Global markets broadly lifted Monday after a preliminary deal to raise the U.S. debt ceiling emerged over the weekend from negotiations between the White House and Republican negotiators.
After the deal was reached between President Joe Biden and House Speaker Kevin McCarthy (R., Calif.) on Saturday, the text was released late Sunday in an effort to shore up support from both sides of the political aisle, despite continued opposition from some U.S. lawmakers. Congressional votes on the deal could come as early as Wednesday in the House.
Asian markets largely climbed Monday, led by a 1.0% rise in Japan’s Nikkei 225 Index. However, Chinese markets dragged with Hong Kong’s Hang Seng Index down 0.8%. In Europe, the Stoxx Europe 600 Index was up 0.1% in early trading.
U.S. markets are closed on Monday for the Memorial Day federal holiday. Spot gold prices were down 0.1%, suggesting some lessened appetite for safe-haven assets.
“Risk assets could potentially rally as markets will be relieved of the risks of a U.S. default, as well as with the avoidance of steep spending cuts. But still the negotiated deal needs to pass through both the House and the Senate, and there could likely emerge some opponents that could still delay the signing until the X-date of June 5,” analysts at Saxo Bank wrote in a research note on Monday.
Write to Adam Clark at adam.clark@barrons.com
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