European markets opened hesitantly today as a lack of progress over the weekend on extending the US debt ceiling spooked investors. Despite Republicans and President Obama holding a 90-minute talk to try and find a compromise to avoid a default, a concrete resolution failed to be produced.
Nevertheless, Senate leaders still remained confident last night that a deal will be agreed by the 17th October deadline and even Mario Draghi, the head of the ECB, informed reporters over the weekend that a deal should happen before the unthinkable happens.
Clearly most investors believed that a deal would be agreed by now given the fact that the deadline is only a few days away. Thus, it seems analysts are now drawing up plans for what would happen to the world economy if the US was to default, instead of assuming the delay is a result of political point scoring.