(Bloomberg) — US and European equity futures were steady as investors awaited possible progress on debt-limit talks while Asian shares rose after President Joe Biden said relations with China should improve “very shortly”.
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Hong Kong stocks led gains in Asia, with the Hang Seng Index jumping more than 1%, pushed higher by technology companies. Historically cheap valuations following consecutive weekly declines added further support. The region-wide rally also saw Japanese, South Korean and mainland China stocks climb, but excluded Australian blue chips.
“I think you’re gonna see that begin to thaw very shortly,” Biden said of ties between the US and China in Sunday comments after a Group-of-Seven summit in Japan. He added that his administration was considering whether to lift sanctions on Chinese Defense Minister Li Shangfu.
Traders also remain fixated on the path for Fed’s benchmark rate, with bets for a hike in June trimmed to 25% as Jerome Powell signaled a pause. Minneapolis Fed President Neel Kashkari also said he may support a pause, Dow Jones reported.
“Market pricing is firmly back to thinking the Fed will pause,” Chris Weston, head of research at Pepperstone Group Ltd., wrote in a research note. “The US debt ceiling, and the price action in US banks, are going to dominate the narrative.”
South Korea’s Kospi gained as much as 1%, on track for its sixth daily advance. Samsung Electronics Co. and SK Hynix Inc. were among the biggest contributors to the benchmark after China said their US rival Micron Technology Inc. had failed to pass a cybersecurity review.
The South Korean won led the gains among emerging-market currencies while the offshore yuan weakened. A gauge of the dollar was little changed. Treasuries made small gains.
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Debt Talks
President Biden and House Speaker Kevin McCarthy are scheduled to meet in Washington Monday following a “productive” call between the pair over the weekend. Yet one Republican negotiator is insisting on a multi-year spending limit, complicating talks even as…
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