9.00am BST

Here's a round-up of what City experts are saying about the US gridlock this morning, after last night's debacle in Washington:

Marc Ostwald of Monument Securities

Plunging into the unknown or will some of can-kicking achieved? Crisis postponed?

Perhaps markets could then return their focus to economic developments, even if it will take some time to properly fathom how much damage has been done to the US economy, not only in terms of the short-term impact on monthly data, but also to that which was supposed to be protected by the 14th Amendment Section 4:

"The validity of the public debt of the United States, authorized by law, including debts incurred for payment of pensions and bounties for services in suppressing insurrection or rebellion, shall not be questioned"

and indeed the US dollar, in which it is denominated, even if this will be a far more protracted and evolutionary phenomenon.

Jan von Gerich (@JanVonGerich) Bank bailouts continue to divide opinions. House throws the ball back to the Senate. Bad politics hitting confidence. http://t.co/BsZ40mabim

Gary Jenkins of Swordfish Research

The only real surprise regarding Fitch putting the US AAA rating on watch for downgrade was that they didn’t do it earlier. Rating agencies opine on the probability of default, thus one would expect them to err on the side of caution. Instead we have a situation where it is possible that the US could default on its debt whilst still enjoying a Aaa rating with a stable outlook from Moody’s. Anyhow the key point about the Fitch statement is that even if the US does raise the debt ceiling and avoid a default that the rating may still be lowered: “The prolonged negotiations over raising the debt ceiling risks undermining confidence in the role of the US dollar as the preeminent global reserve currency, by casting doubt over the full faith and credit of the US. This ‘faith’ is a key reason why the US AAA rating can tolerate a substantially higher level of public debt than other AAA sovereigns.”

So even if the US does avoid the most avoidable default in the history of borrowing they could still end up being downgraded.

My only sympathy with the agencies rests with where exactly the US should be rated right now. If a normal borrower was this close to a potential default then they would probably be rated closer to junk, but the US is not a normal borrower and thus I think that Fitch’s approach of putting the rating on watch is the right thing to do.

The good news is that US politicians have said that they will resume talks today. Aside from some rather large movements in Treasury bills which mature tomorrow the market reaction to the latest breakdown in talks has been fairly mooted. Indeed US equity futures are in positive territory and I think it is fair to say that this is one of those situations where everyone will expect a deal to be done right up until the point that it doesn’t get done in time to avoid a missed payment.

I still think that they will agree on some kind of deal, after all, would politicians really be so stupid as to go through a process in which the potential unintended consequences could be so harmful, where there is no precedent for their actions and where there is no clear plan of what exactly they are trying to achieve? Then again…

Robin Bew (@RobinBew) Still think #US debt default will be averted despite renewed talks breakdown! but see that banks are implementing contingency plans

Michael Hewson of CMC Markets:

Maybe now is the time for markets to start turning the screw in order to impress upon complacent politicians that playing Russian roulette with the US economy is not the low risk strategy that many on Capitol Hill maybe think that it is. Even if equity markets aren’t concerned about the ability to pass some form of deal US short term treasury markets are, as yields continue to pike higher.

While there might be the possibility of a deal between Republicans and Democrats in the Senate to raise the debt ceiling as well as reopen the government, the Congress remains a very different animal. Selling any deal to the Republican majority here has always been a major sticking point.

While markets continue to remain fairly relaxed about the prospect of a deal, with Europe’s markets set to open just slightly lower, the urgency of finding a solution could well continue to remain elusive.

For now it would appear that certain politicians don't really get it and while we may not get a default on 17th you can be sure that if we go beyond the deadline, which looks increasingly likely, expect investors to start voting with their feet if we don’t get a deal by the weekend.

The next deadline would then be 23rd October when a $12bn social security payment is due.