President Biden and House Speaker Kevin McCarthy appeared on track to gain enough bipartisan support to suspend the debt limit, so far confining dissent to the progressive and conservative wings of their parties, though procedural chokepoints could still complicate the race to avoid an unprecedented default. The debt-ceiling agreement, which Biden and McCarthy (R., Calif.) made final on Sunday, would suspend the borrowing limit for two years and curb government spending during that time. It would cut spending on domestic priorities favored by Democrats while boosting military spending by about 3%. It also would extend limits on food assistance to some beneficiaries to prod them to find jobs. After marathon negotiations, Biden and McCarthy spent much of the holiday weekend pitching their respective parties on the deal. White House officials canvassed Democrats on Capitol Hill to brief them about the agreement, while McCarthy promoted the bill to conservatives as a meaningful spending reform. In both chambers, vocal opponents of the bill could slow its passage, threatening to derail the effort to avoid an unprecedented U.S. default. Some conservatives in the House and Senate have said they would oppose the deal because it doesn't go far enough to limit federal spending, while some progressives charge that the spending curbs are too steep.

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The Swiss stock market briefly slipped into negative territory a little before noon on Friday, but recovered and gained in strength as the session progressed to eventually close on a bright note. Signs of progress in U.S. debt ceiling talks helped lift sentiment. The benchmark SMI, which dropped to 11,313.88 around noon, ended with a gain of 108.98 points or 0.96% at 11,434.24, about 30 points off the day's high. Logitech gained nearly 2.5%. Richemont, Sika and ABB climbed 2.08%, 1.82% and 1.57%, respectively. UBS Group, Swiss Re, Givaudan, Swiss Life Holding, Lonza Group, Geberit, Alcon, Roche Holding, Zurich Insurance Group and Credit Suisse gained 1 to 1.4%. Partners Group declined nearly 2%, and Swisscom ended lower by about 0.4%. Among the stocks in the Swiss Mid Price Index, VAT Group surged nearly 4% and AMS gained 3.1%, while Georg Fischer climbed 2.87%. Bachem Holding, Kuehne & Nagel, Flughafen Zurich and Straumann Holding gained 2.2 to 2.6%. SIG Combibloc, Belimo Holding, Baloise Holding, Schindler Ps and Swatch Group also ended notably higher. In economic news, data from Swiss Federal Statistical Office showed Switzerland's non-farm payrolls increased 2.2% year-on-year to 5.389 million in the first quarter of 2023, slightly lower than the 2.3% rise in the previous three-month period.

European stocks closed lower on Monday as worries about inflation and further interest rate hikes offset positive progress in U.S. debt ceiling deal negotiations. With the U.K. stock market and Wall Street, and several markets in Europe closed for a holiday, volumes were rather thin today. The pan European Stoxx 600 edged down 0.12%. Germany's DAX and France's CAC 40 ended lower by 0.2% and 0.21%, respectively. The Switzerland market was closed for Pentecost. In the French market, WorldLine drifted down by about 2.5%. STMicroElectronics, Societe Generale, Essilor, Dassault Systemes, L'Oreal, Kering and Renault lost 0.6 to 1.2%. Unibail Rodamco climbed about 1.2%. Carrefour, AXA, Bouygues and Veolia gained 0.4 to 0.8%. In the German market, Continental ended more than 2% down. Zalando, Covestro, Puma, Adidas, Vonovia, Porsche and SAP posted moderate losses. Fresenius Medical Care and Sartorius gained about 1.4% and 1.2%, respectively.

Markets in the U.S. were closed on Monday for a holiday.

On the stock exchanges in East Asia and Australia, the relief over the preliminary agreement in the US debt dispute has already evaporated on Tuesday. Instead, the focus shifted to the strained relations between China and the USA after Beijing rejected a meeting of the defence ministers of both countries. In Shanghai, the composite index falls 0.7 per cent. In addition to the recent disagreements between Washington and Beijing, the unexpectedly slow recovery of the domestic economy from the effects of the pandemic is weighing on the recently released economic data. In Hong Kong, the Hang Seng Index is down 1.0 per cent. Chris Weston, head of research at Pepperstone, speaks of capital flight as a result of the weakening economy and political tensions.

U.S. treasurys were little changed early Tuesday. While a U.S. debt ceiling deal has been reached, uncertainty about whether the Fed is done with interest rate hikes, and a potential recession are weighing on investor sentiment.

Goldman Sachs raises the Siemens target to EUR 245 (218) – Buy

Baader lowers the Tui target to EUR 8.19 (12.10) – Buy

Baader raises the Dufry target to CHF 45 (40) – Add

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