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US Debt Ceiling Talks Remain Focus Amid Quiet Data Calendar

EMERGING MARKETS
  • President Joe Biden and Republican House Speaker Kevin McCarthy are set to meet Monday for talks on averting a catastrophic US default as time runs short and key differences remain. The leaders’ hand-picked negotiators met for more than two hours Sunday evening in McCarthy’s office at the US Capitol but did not discuss the status of those discussions with reporters.
  • Markets continue to revolve around US matters early Monday, with debt ceiling negotiations and tensions with China top of mind for traders. The USD Index sits moderately weaker - although within a narrow range for the session and still within close proximity of the multi-month highs posted last week. 103.295 marks the next intraday upside level in the DXY, ahead of 103.373 (61.8% retracement for the Thurs - Monday downleg) ahead of multi-month highs at 103.624.
  • Larger options rolling off at today's cut include a sizeable strike at 1.0825-40 in EUR/USD (E2.3bln), with E609mln set to roll off just above at 1.0845-50. Some interest also noted in USD/JPY near current spot rate at Y137.90-05 ($567mln) and below at Y137.50 ($825mln).
  • There are no data releases set to distract markets Monday, keeping focus on a busy calendar of central bank speak. ECB's Vujcic, de Guindos, Holzmann, Lane, Villeroy and de Cos make up a frantic European calendar, while Fed's Bullard, Bostic, Barkin and Daly represent the FOMC.

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