With no agreement reached by lawmakers in the States and the threat of default looming, markets across Europe and Asia have begun the week on a downbeat note.

In the UK, the FTSE 100 was down 0.9% or 55 points by 10:30am, at 6,398, with a variety of retailers including Marks & Spencer and SportsDirect all among the worst performers.

The losses were mirrored in Europe, where Germany’s Dax was down 1.1% and France’s CAC 40 was also off 1.1% in morning trading.

Overnight, Japan’s Nikkei also shed 1.2%, while Hong Kong’s Hang Seng index fell 0.7%, as speculation continues to build about what kind of trauma a US default would cause.

According to Bloomberg, scores of investors, money managers, bankers, and traders view a US default as a catastrophe which would dwarf the impact of the Lehman Brothers collapse which sparked the global financial crisis back in 2008.

Despite this, markets are yet to sell off dramatically as investors hold their positions in hopes an agreement the Democrats and Republicans will reach an agreement on the debt ceiling.