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When it rains, it pours By Reuters


© Reuters.

Dhara Ranasinghe’s view of the coming day.

Markets are experiencing more crises than ever. The looming U.S. shutdown adds to market anxiety. It comes amid signs of tension in China due to a power crisis and signs that China is becoming increasingly hawkish.

The U.S. Senate Republicans blocked President Joe Biden’s Democrats’ attempt to prevent a possible crippling U.S. default on credit.

The federal government’s funding will expire Thursday. Borrowing authority is set to run out Oct. 18. Democrats want to avoid two financial disasters and advance Biden’s legislative agenda.

The shutdown could cause furloughs to hundreds of thousands of federal workers, right in the middle of an epidemic of public health.

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Markets couldn’t have chosen a worse time.

The cash-strapped China Evergrande Group has begun to sell assets in order to meet the deadline for making a payment of a bond coupon to overseas investors. The No. The No.2 economy is also affected by power shortages.

Markets around the world are also being affected by an increase in bond yields. The U.S. ten-year yields have seen a 20 basis point increase so far in March, which is their largest gain since March.

However, Treasury and European bond market are more stable this morning than stock markets in the United States and Europe. Stock futures and U.S. stocks are also higher. The recovery of sterling is also evident, despite it taking a lot of damage due to fears about a global fuel crisis.

On Wednesday, markets will pay attention to the European Central Bank’s Christine Lagarde as well as Andrew Bailey from the Bank of England and Jerome Powell of the Fed.

Key developments that should provide more direction to markets on Wednesday:

-Oil falls for second day as supply-driven rally peters out

– Soft-spoken consensus builder Kishida to become Japan’s next PM

– Japan may kick off process to sell $8.5 bln shares in Japan Post- Bloomberg

– JPMorgan (NYSE:)’s Dimon cautions a U.S. default would be ‘potentially catastrophic’

– Emerging markets: Thailand central bank

– Euro zone inflation expectations, consumer sentiment

– Europe earnings: Next

US Treasury yields set for biggest monthly jump since March

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