GBP

Markets are stuck in a state of suspended animation after President Biden and House Speaker McCarthy emerged from last night’s talks without a deal to raise the US debt ceiling. According to Biden, the two leaders agreed that a “default is off the table,” and McCarthy said “The tone tonight was better than any other time we have had discussions”. McCarthy called the talks “productive” but said “we don’t have an agreement yet,” with both noting that differences over tax changes were lengthening the standoff. An earlier statement from Treasury Secretary Janet Yellen said “we estimate that it is highly likely...

A more risk-supportive tone is evident across currency markets this morning after Treasury Secretary Yellen said debt ceiling negotiations were making progress. Speaking on the sidelines of the G7 finance minister meeting in Japan, she said “I’m hopeful. I think the negotiations are very active. I’m told they have found some areas of agreement”. Treasury yields and equity futures are up, and most major currencies are advancing against the dollar. The cadence of economic events will slow this week, with a string of central bank speakers competing with second-tier data releases in Europe and Asia for market attention.  Today’s Federal Reserve...