Stocks Rise as US Debt Ceiling Deal Reached: European Markets Open Up

PARIS (Reuters) – European stock markets opened on Monday are up slightly at the start of the session, after a provisional agreement was reached over the weekend in the United States on the debt ceiling.

In Paris, the gain 0.22% to 7,335.13 points around 07:40 GMT. In Frankfurt, the advance of 0.32%.

The index is up 0.23% and the 0.08%.

The London Stock Exchange is closed, the day being a public holiday in the United Kingdom for the “Spring Bank Holiday”. American investors are also on a long weekend, for “Memorial Day”.

After weeks of negotiations, US President Joe Biden announced on Sunday that he had finalized a budget agreement with the “speaker” of the House of Representatives to suspend the public debt ceiling until January 1, 2025, indicating that a text was ready to be voted on by Congress.

“The markets act as if the agreement is going to be adopted but if it is not adopted (…) in particular before the ‘date X’ (the day when the government will no longer be able to honor its bills and estimated at 5 June by the Treasury, editor’s note) then the rally that we saw at the end of last week and at the start of the day will give a huge pullback,” said Khoon Goh, director of Asia studies at ANZ.

In parallel with the negotiations that will be played out in Congress, investors will be attentive this week to several leading indicators that could influence the monetary policy decisions of the Federal Reserve and the European Central Bank.

In the United States, the number of job vacancies in April and the official employment report for May will be published on Wednesday and Friday respectively. In the euro zone, the first estimate of inflation for May is expected on Thursday.

On the stock side, the Swedish real estate group SBB (+9.04%) is leading the Stoxx 600 after announcing an extension of its ongoing strategic review, including a potential sale of the company, business segments or ‘assets.

(Laetitia Volga, edited by Claude Chendjou)