- US approaches debt ceiling
- ECB tightens checks on European banks
- Merkel faces tough coalition talks
- Chinese exports fall, inflation rises
FTSE 100: 0.16%
CAC 40: -0.17%
FTSE MIB: 0.56%
IBEX 35: 0.31%
Stoxx 600: 0.06%
European equities were mixed as the US entered its third week of a government shutdown and approached its debt ceiling deadline.
The US is three days away from hitting its $16.7trn borrowing limit. If the government fails to reach a deal by Thursday, the US could default on its debt.
Lawmakers remain at loggerheads after the Democrats rejected a number of GOP offers over the weekend on the debt ceiling.
"It's quite incredible that the uncertainty surrounding the debt ceiling hasn't transformed more into negativity, given that we're now so close to the deadline," said Craig Erlam, Market Analyst at Alpari.
"This suggests that investors remain unconvinced that the debt ceiling will be hit, despite negotiations be unsuccessful so far."
The government has been in a partial shutdown since October 1st after missing its deadline to agree on a budget.
ECB clamps down on banks
European Central Bank Executive Board member Benoit Coeure said there will be three different checks on the balance sheets of European banks to ensure credibility.
The ECB will be taking over regulation of Europe's lenders to avoid another banking crisis sparked by sovereign debt.
"The way we will do it next year will be very different from the way that the previous two stress tests were done," Coeure said at an event in Washington yesterday.
"Any number provided by the banks will first be checked by the national supervisor, then there will be a second check at the European level, in Frankfurt. And then there will be a third check by independent auditors."
Merkel faces struggle on coalition talks
Chancellor Angela Merkel faces a difficult challenge this week to form a government as prospective coalition partners increase demands to start official negotiations.
The Social Democrats (SPD) party has commanded a nationwide minimum wage of €8.50 ($11.51) an hour while the Greens party is putting doubts on talks with Merkel's Christian Democratic party.
"It's clear above all that there won't be a government with the SPD" without an obligatory minimum wage, SPD General-Secretary Andrea Nahles told Bild am Sonntag in an interview yesterday. "Our members won't accept anything else."
Merkel is trying to form a coalition after failing to secure enough votes to win the election last month.
RBS mortgage applications rise on Help to Buy
Royal Bank of Scotland slumped after saying yesterday that it had booked up 5,000 mortgage appointments with customers within just three hours of the Help to Buy scheme going live last week.
Chinese exports fell in September by 0.3% from a year earlier, against expectations of a 6% rise, data showed on Saturday.
Separate data showed inflation jumped to a seven-month high of 3.1% last month as poor weather drove up food prices.
The reports refuelled worries about the health of world's second largest economy.