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At 02:00 ET (06:00 GMT), the DAX futures contract in Germany traded 0.1% lower, CAC 40 futures in France traded flat and the FTSE 100 futures contract in the U.K. fell 0.1%.
U.S. President Joe Biden and House Speaker Kevin McCarthy ended discussions late Monday with no agreement on how to raise the U.S. government’s $31.4 trillion debt ceiling.
Some hints of progress emerged from the talks, with McCarthy saying the meeting was “productive”, but there are less than two weeks before a possible first-ever U.S. government default that would roil the financial markets and likely lead to a global recession.
For now, equity investors seem wary but largely unflustered, in large part because most are confident a deal will eventually be reached, but volatility could rise as the June 1 deadline approaches.
Back in Europe, the focus will be on the May preliminary purchasing managers’ index figures for the region, widely-watched gauges of sentiment in both the manufacturing and services industries.
Better-than-expected PMI surveys helped boost sentiment in April, and another positive view of the services sector is expected to again make up for lackluster manufacturing.
Asia offered a mixed lead, with Japanese manufacturing activity expanding for the first time in seven months while services hit record growth, but Australian services growth slowed.
The European earnings season is coming to a close, but Julius Baer (SIX:BAER) is scheduled to release an interim report which is likely to provide clues as to how much the Swiss wealth manager is benefiting from UBS’s takeover of troubled rival Credit Suisse earlier this year.
Oil prices edged higher Tuesday as the U.S. driving season draws nearer, although uncertainty over a potential U.S. debt default limited gains.
Markets are betting that U.S. fuel consumption will pick up with the start of the summer season, which is usually marked by the Memorial Day weekend. This, coupled with disruptions in Canadian supply due to wildfires in the oil-rich Alberta province, pointed to tighter oil markets in the coming months.
By 02:00 ET, U.S. crude futures traded 0.4% higher at $72.31 a barrel, while the Brent contract climbed 0.3% to $76.22.
Additionally, gold futures rose 0.7% to $1,962.70/oz, while EUR/USD traded 0.1% lower at 1.0806.
