President Obama met congress for the first time since the shutdown last night in an attempt bring an end to the US government shutdown. This generated optimism in the markets with Asian stocks performing well overnight combined with a 6-month high for the Chinese Service Industry. The meeting however proved futile with both sides unwilling to budge on positions held pre-shutdown and instead suggested a long and drawn out shutdown. This failure in bi-partisan politics could have wider implications than merely shutting down the US government. If the both sides continue to play chicken with each other and fail to agree before the debt ceiling deadline, Oct 17th, the government would only have cash left to pay bills and the chance of default goes from unthinkable to near certainty.
In UK news a big win for BP in its on-going Deepwater Horizon legal battle, compensation payments can now stop to companies that had not experienced actual injury traceable to loss. Investors will still be mulling over yesterday’s tory party conference where David Cameron closed on his outlook for the economic recovery and request from voters to let him finish the job.