Global share indexes edged up while Wall Street skidded and the dollar slid yesterday as debt ceiling talks in Washington raised concerns and investors await US inflation data this week that should provide more clarity on Federal Reserve monetary policy.
Treasury yields rose on increased optimism that the worst stresses in the US regional banking system may be over, while gold rose as the dollar eased and crude oil advanced about 2 per cent.
US President Joe Biden and top Republicans and Democrats from Congress are set to sit down this week to try to resolve a three-month standoff over the $31.4 trillion US debt ceiling and avoid a crippling default before the end of May.
Biden is due to meet at the White House today with Republican House of Representatives Speaker Kevin McCarthy for the first time since Feb. 1.
“Unfortunately it’s probably market turmoil that’s going to create the political cover for Biden and McCarthy to come up with some kind of a deal,” said Jack Ablin, chief investment officer and founding partner at Cresset Wealth Advisors.
In Europe, the broad pan-regional STOXX 600 index rose 0.34pc on expectations non-U.S. stocks will outperform in the months ahead. MSCI’s gauge of stocks across the globe , which is tilted toward U.S. assets, gained 0.20pc
On Wall Street, the Dow Jones Industrial Average fell 0.2pc, the S&P 500 lost 0.03pc and the Nasdaq Composite dropped 0.18pc.
The dollar remained relatively weaker against most of its major peers. The dollar index fell 0.049pc, while the euro fell 0.03pc to $1.1015.
Sterling, which has gained 4.4pc against the dollar this year, earlier hit a 12-month high of 1.2668 ahead of an expected Bank of England rate increase on Thursday.