European stocks were largely mixed on Monday morning as traders remain on edge while awaiting news on the ongoing U.S. debt ceiling talks.
U.S. President Joe Biden and House Republican Speaker Kevin McCarthy are expected to meet on Monday to discuss the possibility of raising the government’s debt ceiling, with Congress looking to reach an agreement before the June 1 deadline. Should they fail to reach a consensus by that time, the U.S. may be subject to a catastrophic default on its debts; an unprecedented feat that could plummet markets and spike interest rates.
The European Stoxx 600 fell by 0.03% on Monday morning, while the MSCI All-World index edged 0.12% higher. London’s FTSE 100 climbed by 0.19%. Across the Atlantic, U.S. stocks also appeared mixed, with futures on the S&P 500 sliding by 0.15% while those on the Nasdaq 100 gained 0.03%.
HSBC chief Asia economist Frederic Neumann assured that his company believes the ongoing debt ceiling concerns to be short-lived. Still, this is no guarantee, as the risk of long-term issues remains.
“If this is more drawn out than expected, then this would likely depress U.S. growth … but it’s not our base case at the moment, because we do think that we’ll find a resolution either just before the deadline or just after the deadline,” Neumann assured investors.