European stocks are expected to open in positive territory on Monday following news that U.S. congressional leaders have backed a deal to raise the debt ceiling which will be voted on in Washington later today.
President Obama has called on lawmakers to do the “right thing” and pass the compromise deal, which should cut $2.4 trillion from the federal debt over the next decade.
It will be a day of high drama in Washington as it remains unclear whether enough support can be delivered by both Republican and Democrat leaders in the House for a deal that is opposed by both the left and right.
Stocks in Asia rose sharply on news of the deal, which has also boosted U.S. futures in overnight trade. Gold fell while the dollar gained against the yen and Swiss franc but failed to make gains against the euro.
Away from the debt talks in the U.S., investors will focus on the Chinese economy following PMI manufacturing data showing the sector contracted in July.
At 9:15 CET we get first-half earnings from HSBC. Reports of major job cuts have been rife for days, and overnight the bank unveiled a $1 billion deal to sell its U.S. branches to First Niagara Financial Group.
In the UK, the Confederation of British Industry cut its growth target, warning that growth will be modest this year as consumers spend less and business sentiment is hit by the uncertainties facing the global economy.