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SYDNEY, May 22 Reuters European shares were off to a cautious start on Monday while Wall Street futures struggled, with traders left on edge as U.S. debt ceiling negotiations approached crunch time after stalling last week.

U.S. President Joe Biden and House Republican Speaker Kevin McCarthy will meet to discuss the debt ceiling on Monday, less than two weeks before a June 1 deadline after which Treasury expects the federal government will struggle to pay its debts.

A failure to lift the debt ceiling would trigger a default, likely sparking chaos in financial markets and a spike in interest rates.

The MSCI AllWorld index was up 0.12 on the day, while Europe39;s STOXX 600 fell 0.03. London39;s FTSE 100 gained 0.19.

U.S. stock index futures similarly painted a mixed picture, with SP 500 futures falling 0.15 while Nasdaq futures rose 0.03.

We believe that the debt ceiling issues in the U.S. will remain quite shortlived. Certainly there are risks there of greater financial volatility, said HSBC chief Asia economist Frederic Neumann at a webinar on Monday.

If this is more drawn out than expected, then this would likely depress U.S. growth … but it39;s not our base case at the moment, because we do think that we39;ll find a resolution either just…