This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.
Equity markets have reacted relatively well to the deadlock in Washington, which has led to the first partial shutdown in 17 years. The failure to reach an agreement over the US budget could leave thousands of state workers on a reduced week with no guarantee of back pay. The budget discussions will soon take a back seat to the debt ceiling talks which take centre stage in mid to early October, and these negotiations pose more of a threat to the US credit rating than a partial shutdown.
In London, the mining sector is lower for the second day in a row after the latest manufacturing report from Beijing came in below expectations; the Chinese economy is not making the turnaround that some economists had hoped. European equities are outperforming their UK equivalent after the jobless rate in Germany and Italy unexpectedly ticked higher, as traders interpret the bad news as good news following Mario Draghi's assertion that the ECB will support the region if necessary.
We are expecting the Dow Jones to open 30 points higher at 15,159, as traders shrug off the partial government shutdown.