LONDON (AP) — Financial markets were largely steady in holiday-thinned trading Monday though concerns remain over the progress of U.S. budget discussions and the future of the economic reform program in Italy.

For weeks, the discussions between the White House and Congress over a budget deal have been the main driver in markets. If a deal isn’t agreed to by the start of 2013, automatic spending cuts and tax increases worth hundreds of billions of dollars will be imposed — which many economists think could push the U.S. economy back into recession.