European markets opened cautiously today as a deadlock between politicians over a compromise regarding the US debt ceiling continued to weigh on investors’ sentiment. Although most investors believe that a deal will be reached by the 17th October deadline, investors are still concerned with the impact their portfolios are likely to take in the meantime.
In addition, pressure from China over the possible consequences of a deal not being reached is arguably making matters worse. Up until now, international officials have refrained from voicing their concerns over the crisis. However, when one of the United States’ top lenders announces their dissatisfaction over the current disaster then perhaps this should be more of an incentive for officials to reach a deal.
Nevertheless, it seems Democrats are continuing to call Republicans’ bluff over allowing the US to default by dismissing the possibility of a compromise regarding Obamacare. Only time will tell whether a failure to give ground now will prove detrimental for the world economy later.