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Biden and McCarthy to speak on avoiding debt-ceiling disaster, Goldman Sachs says Treasury cash could dry up as soon as June 8, and US-China [View in browser]( [Bloomberg]( Biden and McCarthy to speak on avoiding debt-ceiling disaster, Goldman Sachs says Treasury cash could dry up as soon as June 8, and US-China may be getting over the suspected spy balloon. — [Liza Tetley]( Monday talks [President Joe Biden and House speaker Kevin McCarthy are set to meet Monday for talks on averting an imminent US debt default](. The last few days have been a whirlwind of progress and deadlock as both sides grapple for political advantage, with negotiators meeting for more than two hours Sunday evening in McCarthy’s office. Biden also called McCarthy from Air Force One on his way back from the G-7 summit in Japan, a call that McCarthy called “productive.” Biden said before departing for Japan that he’d cut spending and that the Republicans must now shift their demands. Treasury cash [Goldman Sachs estimates that by June 8 or 9 the US Treasury will see its cash levels drop below the $30 billion]( it’s said is the bare minimum it needs to meet its debt obligations. Meanwhile, Treasury Secretary Janet Yellen has been reiterating her warning that the Treasury could exceed the limit as soon as June 1. “While we expect a deal to occur ahead of the deadline, we also expect a few more twists along the way, and suspect that markets are likely to price in additional risk before the debt limit is finally raised,” Goldman economists said in the note. Thawing relations Biden has said he expects[US relations with China to improve soon as a spat over an alleged spy balloon earlier this year shows signs of blowing over](. Speaking to reporters on Sunday at the end of the G-7 summit in Japan, he said “I think you’re gonna see that begin to thaw very shortly.” His remarks came just hours before China said it found serious cybersecurity risks after conducting a review of Micron Technology. The two superpowers also still disagree on a lot — the US has promised a reaction if China acts unilaterally to invade Taiwan, for instance. Muted markets Contracts on the S&P 500 and Nasdaq are flat this morning, edging marginally higher as anxiety over the US debt-ceiling prevails. Treasury yields are falling, with moves more pronounced toward the short-dated end. A measure of the dollar is weakening slightly, as are oil prices and most metals. Coming up… No data today, but there are a few Fed speakers. We’ve got Bullard at 8:30 a.m., Daly at 11:05 a.m., and then Bostic and Barkin at 11:30 a.m. At 11:30 a.m., the US will sell $57 billion 13-week and $54 billion 26-week bills. Earnings today include Zoom Video, HEICO, and Nordson, while JPMorgan is hosting an investor day What we’ve been reading Here’s what caught our eye over the past 24 hours: - [China’s debt mess is set to worsen]( - [China bans Micron chips](after cybersecurity review - UK[house asking prices climb at fastest pace in a year]( - [Saudi Arabia is reportedly willing to pay Lionel Messi $400 million-a-year]( - European Central Bank president [Christine Lagarde says the fight with inflation isn’t over]( - [SpaceX launched four private astronauts]( en route to the International Space Station - How [Ron DeSantis is trying to win over older Trump voters](bbg://news/stories/RV1YEFTVI5MO) And finally, here’s what Joe’s interested in this morning People love pontificating about the end of the dollar. But even most doomers and declinists have to admit that for now and for the time being, there aren't many good alternatives out there for most countries. Bitcoin? That-volatile digital currency, [where they draw monkey pictures right on the blockchain](? Get real. Gold? What is the 19th century? And then the conversation turns to the Renminbi. And there it's acknowledged that due to China's massive size and growing global influence, that maybe one day it could be a legit dollar competitor. But for now, owing to the country's trade surplus, and tight capital controls that may be one day down the road it could play a greater global role. And then the conversation typically stops there. So on [today's Odd Lots]( podcast, [Tracy Alloway]( and I attempt to move the conversation further down the road. What would it actually take for the RMB to compete globally? What does China need to do to make it happen? What do other countries need to do. Our guest is [Karthik Sankaran](, longtime currency trader and analyst, who lays out all of the complexities involved. His view is that it's happening. The RMB is growing more international. It's just a very slow process. And there's a lot more to it than China just running a domestic trade deficit. One thing that needs to happen, per Karthik, is that non-Chinese entities (such as the nation of Brazil) need to start borrowing money in RMB. Sometimes you see headlines like about how "Brazil sells soybeans to China in RMB" and everyone makes a big deal about them. But the bigger deal will be when Brazil actually floats an RMB-denominated bond. It's when RMB-starts to get a foothold on the liability side of the balance sheet, not just as a unit of trade, that the network effects can kick in. Because then among other things, Saudi Arabia could sell its oil in RMB and park those RMB in something other than Chinese assets. [He had a great Twitter thread on exactly this](, back in March. In Karthik's view, not only would this accelerate a global RMB presence, it would actually have a stabilizing effect on the real economy. This was a real "aha moment" on the podcast. Tracy and I have had several conversations with [BIS top economist Hyun Song Shin](, about the challenges of a global economy that basically exists on the Dollar Standard, and the problems that causes. Because the dollar is basically the only global currency, everyone runs (implicitly) on American monetary policy. When Saudi Arabia is selling oil to some country in dollars, and that country is borrowing in dollars to buy that oil, no matter what's going on domestically in that country or Saudi, American monetary policy effects them. It's a doom loop. RMB internationalization, per Karthik, offers a glimmer of a way out. A world in which Saudi sells to China in RMB, which then invests those RMB in Brazilian assets, which then sells soy to China in RMB and so forth, is a world that is less sensitive to whether the Fed is in inflation fighting mode or not. Anyway, there's a lot more to the conversation than this. But this is an important idea. That a multi-currency world has the potential to be a less brittle world. A world where different central banks can pursue their own domestic needs, without necessarily wrecking the fortunes of other countries whose economies are on a different rhythm. It was a fascinating chat. Find it on [Apple]( or [Spotify](. And then at 1 PM ET today, [come hang out in the Odd Lots discord,]( where we'll be doing a live AMA with Karthik to answer follow-up questions. Follow Bloomberg's Joe Weisenthal on Twitter @TheStalwart. Follow Us Like getting this newsletter? [Subscribe to Bloomberg.com]( for unlimited access to trusted, data-driven journalism and subscriber-only insights. Before it’s here, it’s on the Bloomberg Terminal. Find out more about how the Terminal delivers information and analysis that financial professionals can’t find anywhere else. [Learn more](. Want to sponsor this newsletter? [Get in touch here](. 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