Treasuries and US stock futures advanced on hopes that Congress will pass a debt accord to head off a default as White House and Republican congressional leaders stepped up lobbying in support of the deal. Near-maturity Treasury bills rallied in Asian hours as trading resumed Tuesday after the US markets were closed for Memorial Day.
More broadly, Treasury yields declined across the curve on debt dated from five years to 30 years. The clock, however, is ticking as backers of the deal have only a week to get the agreement through Congress before a possible June 5 default — which could have catastrophic consequences for global markets.
President Joe Biden has been personally calling lawmakers to support the bill, with a vote by the House likely Wednesday, before it goes to the Senate. Contracts on the S&P 500 and Nasdaq 100 rose 0.2% and 0.4%, respectively, while European futures made small gains.
An Asia equity benchmark fell as a key gauge of Hong Kong-listed Chinese shares was headed to enter a bear market. The Hang Seng China Enterprises Index is set to fall for a fifth day, taking its losses from a Jan. 27 peak to about 20%. Shanghai’s benchmark index also fell. – BLOOMBERG
