European stock markets displayed a mixed trend on Monday as investors adopted a cautious stance amid ongoing negotiations regarding the possible raising of the U.S. debt ceiling. At the start of the trading day, Germany's DAX futures dropped by 0.3%, France's CAC 40 futures declined by 0.2%, and the U.K.'s FTSE 100 futures slipped by 0.1%.
The macro calendar in Europe remained relatively light, with attention focused on May's eurozone consumer confidence data and speeches by European Central Bank officials Luis de Guindos and Philip Lane. However, market activity was expected to be subdued as investors awaited updates from Washington on negotiations to avoid a potential U.S. default, which could have dire consequences for the global economy.
Later in the day, President Joe Biden was scheduled to meet with House Republican Speaker Kevin McCarthy in an effort to resume discussions after Republican negotiators unexpectedly walked out of the debt ceiling talks last Friday. U.S. Treasury Secretary Janet Yellen reiterated over the weekend that June 1 is a "hard deadline" for raising the federal debt limit, warning that tough choices would need to be made if Congress fails to act before then.
Amidst the economic uncertainties, positive news emerged from the G7 summit in Japan, where President Biden expressed optimism about improving relations between the U.S. and Beijing. This potential improvement could encourage foreign investors to return to China, providing a boost to its export market as it grapples with a post-COVID economic recovery.
In corporate news, Ryanair reported near-record profits for the year ending in March, expressing cautious optimism about a modest increase in profits over the next 12 months, supported by strong summer demand. Meanwhile, NatWest Group announced plans to repurchase £1.3 billion worth of its shares, reducing the government's stake and bringing the bank closer to private ownership, 15 years after its bailout during the global financial crisis.
Oil prices retreated on Monday, reversing some of last week's gains due to concerns surrounding the ongoing U.S. debt ceiling talks. U.S. crude futures were down 0.7% at $71.19 a barrel, while the Brent contract dropped by the same percentage to reach $75.05. Last week, both contracts experienced a 2% increase, marking the end of four consecutive weeks of significant declines driven by worries over China's slowing growth and the potential economic impact of a U.S. default.
In the precious metals market, gold futures dipped by 0.2% to $1,977.45 per ounce, while the EUR/USD currency pair traded 0.1% lower at 1.0805.
