Kevin Buckland looks ahead to the European and global markets.
Politics take center stage at the start of the new week, with the dispute over the US debt ceiling still the main focus.
Talks between President Joe Biden and lawmakers have been postponed to Friday, but are likely to resume on Tuesday.
Despite these setbacks and deep partisan rifts, Mr. Biden and analysts say there are signs of progress. Biden is confident enough that he still has plans to catch a flight to Hiroshima on Wednesday to attend the G7 summit.
But investors clearly want to see ink on paper. Stock markets fell across most of Asia except Japan on Monday after the US Budget Office backed the idea that the Treasury Department would run out of money early next month.
However, the FX market was eyeing surprising local election results in Thailand and Turkey.
Turkish President Tayyip Erdogan defied pollsters and kept hopes of extending his 20-year rule alive by pushing for a runoff after leading in Sunday’s vote. The lira fell to its lowest level since March, when it was shaken by the devastating earthquake.
Meanwhile, the baht surged after Thailand’s opposition crushed a military-backed party over the weekend, signaling widespread and intense dissatisfaction with the ruling military government.
But the liberal Forward Party and the populist Pheu Thai Party need to not only broker an agreement between themselves, but somehow gain the support of the junta-appointed Senate to form a government.
Graphics: Thailand General Election 2023: Preliminary Results https://www.reuters.com/graphics/THAILAND-ELECTION/zdvxdwzbovx/chart.png
The yuan hit a two-month low as last week’s data showed worrying signs that the best part of China’s coronavirus recovery has already been delayed. Tuesday’s retail sales will be the next test of sluggish consumer demand after the shocking results of imports and inflation.
The People’s Bank of China has resisted for now, opting to keep rates on hold on Monday.
China may have economic problems, but it still wields geopolitical power, sending its Supreme Special Envoy to Ukraine, Russia and other parts of Europe today to discuss a “political solution” to the Ukraine crisis. dispatched.
Key developments that could affect the market on Monday:
Eurogroup meeting in Brussels
Euro zone industrial production data for March
New York Fed Manufacturing May Survey
Fed Speakers, Including Rafael Bostic, Atlanta Fed Conference
(Reporting by Kevin Buckland, Editing by Jacqueline Wong)
