U.S. House Speaker Kevin McCarthy called for spending cuts earlier this week as the U.S. faces the federal debt ceiling. The World Economic Forum kicked off in Davos, but there are big gaps in the delegate lists in the form of China and Russia. The U.S. stock market is closed due to the Martin Luther King Jr. Day holiday, but China and European stock markets are on the upswing as gas prices fell sharply and regulators gave more indulgence to China’s troubled tech sector. Here’s what you need to know about the financial market on Monday, Jan. 16.

1. U.S. PREPARES FOR DEBT CEILING FIGHT

The U.S. House of Representatives is gearing up for a fierce battle over the federal debt ceiling. While the issue is usually political theater that is usually resolved before the country voluntarily defaults, things may play out a little differently this time around.

Austerity on spending plans and debt levels was one of the conditions that new House Speaker Kevin McCarthy bargained away in exchange for the support of Republican hardliners.

The government will reach the congressionally approved ceiling on Thursday, as Treasury Secretary Janet Yellen told both parties in a formal letter last week. After that, emergency measures will be put in place to keep things running, but they will be exhausted by June. That means nearly 5 months of virtual paralysis on Capitol Hill while both parties indulge in their usual game of trying to shift blame to each other.

McCarthy said over the weekend that the Republican Party, which regained control of the House of Representatives in November’s midterm elections, would demand spending cuts in exchange for agreeing to raise the ceiling.

2. “OBSESSED.” DAVOS.

The World Economic Forum will begin in Davos with a line-up that reflects the failures that have befallen globalization over the past few years.

There will be no delegations from either China or Russia at this glitzy event for business and political leaders, a result of the growing alienation of the US from the former and the destruction of most diplomatic bridges with the West by the latter.

A resolution of the conflict in Ukraine seems farther away than ever.

There are also signs that Ukraine’s Western allies are moving closer to sending it battle tanks, something they have so far shied away from for fear of further escalating the conflict. Britain announced it would send 12 Challenger 2 tanks, and German Defense Minister Christine Lambrecht, who had resisted approval to send Leopard 2 tanks to Ukraine, resigned.

3. EQUITY MARKETS IN EUROPE AND CHINA RISE; U.S. MARKET CLOSED DUE TO MARTIN LUTHER KING JR. DAY HOLIDAY

Global equity markets were mixed in the absence of a clear U.S. lead, which is likely to last all day due to the Martin Luther King Jr. Day holiday.

By 06:25 ET (11:25 GMT), the Euro Stoxx 50 index was up less than 0.1%, while the broader Stoxx 600 index was up 0.2%.

Hopes that Europe will avoid an economic slowdown this year have risen in recent days as natural gas prices have collapsed and the euro and pound have strengthened. These two factors will greatly reduce the pressure from imported inflation and reduce the need for sharper interest rate hikes by the Bank of England and the European Central Bank.

4. DIDI BACK IN FAVOR WITH BEIJING

Chinese stock indices rose strongly again the day before; with most major bourses adding another 1.5% or so after Didi (OTC:DIDIY) said it had received Beijing’s permission to start signing up new customers again. The tech-heavy Hang Seng Index, which has added more than 60% over the past 3 months, still paused, losing 1.1%.

The ban on new customer registrations imposed 18 months ago by China’s Cyberspace Administration was a key moment in the struggle against the wealth and power of Chinese internet tycoons, forcing Didi to ignominiously exit the New York Stock Exchange just months after its IPO.

The lifting of the ban is the latest indication that Beijing has eased pressure on the tech sector in recent weeks, following moves such as authorizing financial firm Ant Group to conduct capital-raising activities.

5. OIL PRICES FELL AMID ANOTHER DROP IN GAS PRICES IN EUROPE

Oil prices fell on signs that an expected increase in demand in China may take a little longer than expected, although the impetus came from a different market.

Reports surfaced that Chinese gas traders were diverting cargoes of liquefied natural gas to Europe amid high levels of gas in storage, indicating weak industrial demand in that country.

The same reports have again led to a sharp decline in European benchmark gas prices. The Dutch TTF contract fell 11.2% to a new 16-month low of 57.61 euros per megawatt-hour (1 euro = $1.0827) as Germany’s vice chancellor and energy minister ruled out a repeat of last year’s surge.