Geoffrey Smith 

Investing.com — The President Joe Biden angers China with his pledge to protect Taiwan by using military force. As Christine Lagarde tries to nail down 50 basis points rate increases from the ECB, the euro is on the rise and the dollar falls further. Broadcom’s acquisition of VMware (NYSE:), is set to boost stock prices. Reports will be made after the bell. President of Ukraine calls on the Davos to gather for their first gathering in over two years and seize more than $500 billion from Russia to help pay for Ukraine’s reconstruction. This is what you should know about financial markets Monday 23 May.

1. Biden gaffe on Taiwan angers Beijing

U.S. President Joe Biden indicated that in case of attack from China, the U.S. Military would respond.

“Yes – it’s a commitment we made,” Biden told a press conference during a visit to Japan, adding that unilateral attempts by Beijing to retake the island would result in a situation similar to that in Ukraine.  

White House officials subsequently walked back the comments, saying the U.S.’s policy toward Taiwan “hasn’t changed” and that it stuck by its existing ‘One China’ policy.

However, that wasn’t enough for Chinese officials, who said Biden was “playing with fire.” Foreign Minister Wang Yi warned that: “No-one should underestimate the strong determination, firm will and powerful capabilities of the Chinese people.”

2. Lagarde flags summer rate hikes, bashes crypto

European Central Bank President Christine Lagarde all-but pre-announced a , saying in a blog post that it’s “very likely” the ECB will end its negative rate policy by the end of the third quarter. Elle also suggested that the ECB would end net asset purchase at July’s June meeting.

It rose to its highest levels in just three weeks after the announcement. This forced the dollar to retrace the gains made during the time when the U.S. seemed to be the major advanced economy that was tightening monetary policies.

Lagarde repeated the ECB’s caution about choking off a recovery already under strain from high energy prices and the broader instability caused by Russia’s war in Ukraine. She had some relief on the economic outlook as in the Eurozone’s largest economy, Germany, .

Lagarde had also made waves on Sunday with an interview saying that she thought , “based on nothing” and needing tighter regulation.

3. Stocks to Open Higher after 7 Weeks of Losses

U.S. stock markets are set to open higher later, giving President the benefit of the doubt that he didn’t mean to dramatically escalate tensions with China.

Biden stated in the same conference that he supports some of Trump’s tariffs on Chinese exports.

They were at 6:20 AM ET up 189 point, or 0.6%. Contract was 0.7% higher and the contract up 0.5%. All three of the major cash indices lost 2.5% or 3% last week. This was their seventh consecutive week in losses.

Broadcom chipmaker, and VMware cloud services provider are likely to be the stocks in attention later.  Zoom Video is the top earner after close.

4. Zelensky urges Davos seize Russian assets for Ukraine reconstruction

After a two year hiatus, the World Economic Forum has returned after its second-year absence. The snow may have disappeared from Davos – as have the Russians – but there is still no shortage of the Great and Good finding their ways on private jets to the luxury resort to preach to the rest of the world about Climate Change and social exclusion.

The forum opened on a solemn note, however, with Ukrainian President Volodymyr Zelensky (speaking via video link) urging the audience to consider seizing $500 billion of Russian assets held overseas to pay for Ukraine’s reconstruction.

He noted that “only diplomacy” can end the current war – a subtle shift away from the harsher rhetoric he has used about the need to expel Russian forces from Ukrainian territory. That may or may not be related to the surrender of Ukraine’s last soldiers defending Mariupol, which has freed up thousands of Russian troops for other parts of their offensive.

5. Saudi is a friend to beleaguered oil producers, pushing the price of oil higher

Crude oil prices pushed higher after Saudi Arabia’s oil minister Prince Abdulaziz stood firmly by the so-called OPEC+ production agreement, resisting pressure from its traditional allies in the West to isolate Russia.

Despite increasing evidence from Russia that it is unable increase its output due to west sanctions, OPEC has maintained its policy of setting monthly production quotas. OPEC+’s April production goal was undershot by more than 2 million barrels per day due to problems in exporting nations.

At 6:40 AM ET futures had risen 1.1% to $111.44/barrel, and 1.1% to $111.17/barrel