Crypto News: 5 things to start your day

Good morning. The prospect of a US default draws closer, Morgan Stanley to cut more jobs and a busy morning of data likely dictates the ECB's interest rate decision this week. Here's what people are talking about.

President Joe Biden invited top congressional leaders for a May 9 meeting on the debt limit as the US barrels closer to a potential default that the Treasury Department warned Monday could come sooner than anticipated. The proposed meeting is the first sign of progress in what has become a high-stakes game of chicken in Washington, with nothing short of the credit of the US hanging in the balance. The White House has said it would not negotiate with Republicans over extending the debt ceiling, while House Speaker Kevin McCarthy has vowed not to extend the limit without corresponding cuts to the federal budget. News of the proposed meeting comes as Treasury Secretary Janet Yellen told lawmakers Monday that the nation risked default as soon as June 1.

Morgan Stanley is preparing a fresh round of job cuts amid a renewed focus on expenses as recession fears delay a rebound in dealmaking. Senior managers are discussing plans to eliminate about 3,000 jobs from the global workforce by the end of this quarter, according to people with knowledge of the matter. That would amount to roughly 5% of staff excluding financial advisers and personnel supporting them within the wealth management division. The banking and trading group is expected to shoulder many of the reductions, one of the people said. A spokesperson for New York-based Morgan Stanley, which employs about 82,000 people, declined to comment. Separately, Citi CEO Jane Fraser said the firm would consider "adjustments" to investment bank staffing.

JPMorgan agreed to acquire First Republic in a government-led deal for the failed lender, putting to rest one of the biggest troubled banks remaining after turmoil engulfed the industry in March. The transaction, announced in the early morning hours Monday after First Republic was seized by regulators, makes the biggest US bank even larger while minimizing the damage to the Federal Deposit Insurance Corp.'s guarantee fund. JPMorgan agreed to the takeover after private rescue efforts failed to fill a hole in the troubled lender's balance sheet and customers yanked deposits. First Republic was the second-biggest bank failure in US history, and the fourth regional lender to collapse since early March. "This is getting near the end of it, and hopefully this helps stabilize everything," JPMorgan CEO Jamie Dimon said.

This week's interest-rate decision by the European Central Bank is going down to the wire as officials await two key economic reports arriving just one day before they convene. Tuesday morning will first see the release of the ECB's quarterly survey of bank lending — offering a first glimpse into how the recent financial-sector turmoil has impacted credit growth. An hour later, Eurostat will publish April's inflation reading, with analysts estimating an uptick in the headline measure but a slowdown for the underlying gauge that policymakers currently pay more attention to. There's a broad agreement within the ECB's 26-member Governing Council that the deposit rate, currently 3%, must rise further to combat consumer-price gains that still far exceed the 2% target.

European shares are set for a steady start as traders brace for a slew of central bank decisions this week. The ECB issues its quarterly survey of bank lending, which will show how recent banking issues have affected credit availability. Expected data include manufacturing PMIs for the UK, France, Germany and other countries. There's a flurry of corporate results to wade through as companies such as BP, HSBC and Geberit report.

MLIV Pulse: Will Paris become the dominant European stock exchange? How will the UK fare this year, compared to other major global economies? And finally, as we approach the coronation of King Charles III, we wonder-- will he be the last monarch of the UK? Share your views, fill out our MLIV Pulse survey.

This is what's caught our eye over the past 24 hours

First Republic's jumbo mortgages brought on bank's failure.
Anger against Macron spills onto streets of Paris on May Day.
Stock pickers on Wall Street are going all-in on recession bets.
US weighs more business deposit insurance after banks fail.
Samsung bans staff's AI use after spotting ChatGPT data leak.
Bird flu detectives hunt for clues to stop the next pandemic.
In Buffett's hotel suite, Japan trading houses flagged big plans.

Dollar-yen's uplift from last week's Bank of Japan meeting has set it on a path toward the November highs. With Governor Kazuo Ueda in no rush to change monetary policy and the Federal Reserve poised to hike again, yen bulls will move to the sidelines for a while.

Short-term momentum players will step in to fill the void enjoying the juicy carry available for holding US dollars versus the yen. Even so, there will be a natural handbrake on dollar strength as leveraged punters were already holding a large net short yen exposure, even before the BOJ decision.

As dollar-yen creeps higher some traders will be cashing in on yen shorts, not wanting to hang around for the risk of another round of intervention from Japanese authorities. Last year, Japan waited until the cross was in the 150 area before deploying the heavy weapons. This time around traders will be expecting earlier action.

If bullish dollar momentum is allowed to build up unchecked this year as it did in the August-September period, it would risk dollar-yen exceeding the peak seen in October. That leaves the 140-142 zone as a likely destination until Japanese data is strong enough to bring yen bulls back off the sidelines.