Asian shares and U.S. stock futures rise after debt ceiling agreement

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29th May 2023 – (Hong Kong) Asian shares and U.S. stock futures rose on Monday following an agreement between U.S. President Joe Biden and House Speaker Kevin McCarthy to suspend the government’s debt ceiling until 2025. This has ended a prolonged stalemate and provided relief to investors. S&P 500 futures rose by 0.2%, while Nasdaq futures increased by 0.4%. MSCI‘s broadest index of Asia-Pacific shares outside Japan gained 0.3%, while Tokyo’s Nikkei surged 1.3% to a fresh 33-year high.

However, China’s blue-chips eased 0.1%, and Hong Kong’s Hang Seng index slipped by 0.3% due to profit data for China’s industrial firms on the weekend that reinforced the growing signs of a loss of momentum in the world’s second-biggest economy. The agreement between McCarthy and Biden still has to pass through the narrowly divided Congress. There is also concern about the liquidity squeeze from issuances to bolster cash that is running very low at the Treasury, which may perversely elevate yields and dampen equities.