US equity futures rose while Treasury yields and a gauge of dollar strength were little changed after President Joe Biden and House Speaker Kevin McCarthy said they had a productive talk on the debt ceiling.
Oil also rose on improved risk appetite while gold’s allure as a haven waned, pushing the precious metal toward the lowest level since the end of March. Jitters struck stock indexes in Asia, with benchmarks in Hong Kong and Tokyo erasing earlier gains.
While Biden said he and McCarthy agreed that default was off the table, investors are on tenterhooks with the clock ticking to June 1, when Treasury Secretary Janet Yellen has advised her department may run out of cash.
Any agreement would have to be approved by Congress before then and in the meantime, investors have jacked up the premium they demand to hold US paper that’s most at risk.
The cost of insuring the nation’s sovereign debt against default with derivatives has also climbed. Contracts for the S&P 500 and the Nasdaq 100 increased about 0.2% and Euro Stoxx 50 futures rose marginally. Bitcoin ticked higher for the fourth time in five days. – Bloomberg
