US markets will remain closed until late tonight, leaving the transtasman and Asian markets without direction.
Craigs Investment Partners broker Chris Timms said yesterday yields were still good for investors in the NZX-50 but he expected a volatile week if US President Barack Obama and the House Republicans continued their impasse on funding the budget.
Also of concern was the Republican threat to link the budget talks through to the debt ceiling which expires on October 17. The US needed to increase its $US16.7 trillion ($NZ20.1 trillion) debt ceiling to prevent the world's largest economy defaulting on its debts.
''Everyone is taking such a hard line in the US. The Republicans are holding Obama to ransom - they have him over a barrel. From outside, we are looking at this ridiculous situation and wondering how they got there.
The president has to deal with his opponents to allow the budget to pass and the debt ceiling to increase. It's hard to understand how that happens,'' Mr Timms said.
It appeared from New Zealand that a minority group of Republicans - the Tea Party - was holding the strongest hand in the negotiations.
Any suggestion of ongoing uncertainty would spook the markets. There was likely to be a sell-down in New Zealand and Australia as Americans took their money out of riskier markets and reinvested at home, he said.
The standoff, which began on October 1, shut all but essential government operations and is the latest in a series of budget fights between Mr Obama and Republicans.
In the past, Republicans have insisted on spending cuts as the price for budget deals or lifting the government debt limit. Their current stand is aimed at derailing the president's landmark healthcare reform law to expand health insurance to millions without coverage.
Republicans argue the law is a massive government intrusion into private medicine which will cause insurance premiums to rise, put people out of work and eventually lead to socialised medicine. They have refused to pass a funding bill without attaching measures to undercut the law known as Obamacare.
Mr Obama and his fellow Democrats have vowed to make no concessions on the funding bill or on raising the debt ceiling.
The only sign of agreement over the weekend was the Democrats and Republicans agreeing to retroactively pay 800,000 furloughed federal employees once the Government reopened.
