US President Joe Biden is set to resume talks with lawmakers on the US debt ceiling standoff on Tuesday, after they were postponed on Friday. Despite deep partisan rifts, both Biden and analysts say there are signs of progress. Biden is confident enough that he's still planning on boarding a Wednesday flight to Hiroshima for the G7 summit. Equity markets weakened around most of Asia on Monday, with the notable exception of Japan, after the US budget office backed the idea that Treasury funds will run out at the start of next month. Meanwhile, the baht soared after Thai opposition parties crushed military-backed parties on the weekend, signalling wide and strong discontent with the ruling junta.

The U.S. Treasury is at risk of running out of funds as the Congressional Budget Office warns of a potential crisis if the federal debt limit is not raised or suspended. Lawmakers must act quickly to prevent a financial catastrophe as the federal budget deficit is expected to reach $1.5 trillion in 2023. The CBO's projections are uncertain due to lower-than-expected tax revenue collections and a Supreme Court case involving student loans. The growing debt poses significant risks to the U.S. economy, including higher interest rates, reduced investment, and potential financial crises. Policymakers must consider long-term solutions to address these pressing fiscal challenges.

Investors today are spending less time pouring over individual company balance sheets and are instead trying to predict how the Fed’s balance sheet is changing.