The US government faces its first shutdown in nearly 20 years. Unless an agreement can be reached by tonight on budget spending, Washington goes dark. That's rattling investors with the Dollar falling and US stock futures heading south. And as if that wasn't enough, another crisis in the euro zone as Silvio Berlusconi tries to provoke a political meltdown. Ishaq Siddiqi, Market Analyst from ETX Markets says both situations are causing concern and uncertainty in the markets.

SHOWS: LONDON, ENGLAND, UK (REUTERS - ACCESS ALL) (SEPTEMBER 2013)

1. ETX MARKETS, MARKET ANALYST, ISHAQ SIDDIQI, SAYING:

JOURNALIST ASKING ISHAQ SIDDIQI: 'So we've got the threat of a US government shutdown, we've got Italy's political crisis. How is this going to play out on the markets?'

ISHAQ SIDDIQI: 'Well, I think like there's a lot of incentive in the market now. We've seen that with price action so far this morning. We've opened sharply lower particularly the FTSE MIB Index in Milan and also Italian 10-year yields are now around about 4.7%, so they have jumped very sharply, reflecting that fear in the market. It is uncertainty, markets hate uncertainty and the way this is going to play out, it seems like we may see some 11th-hour deals tonight. That's to prevent a full closure of US - shutdown of the US government. Although it's looking very slim and I think investors are quite worried that we may get a - the implications of something far bigger to come, to take a significant hit on US economic growth going forward. And when it comes to the Italian issue, we have this vote of confidence by the PM Enrico Letta on Wednesday and I think investors are looking forward to that to see where we're going next. It seems like they're going to try their best to work out a new coalition government and if that doesn't happen in this new elections and if it's new elections, then there's a mere lot of worries in the market going forward. '

JOURNALIST: 'And markets don't really want a new election, do they?'

ISHAQ SIDDIQI: 'No, absolutely not. Given the fact that back in April, we had such an inconclusive result, a lot of fear in the market about what was going to happen with its slates, that the third largest bond market in the world, it is absolutely imperative for Italy to stay in the euro zone. It's a removal of itself from the euro zone will essential mean the end of the euro zone itself. So I think the bigger talking point here is are we going to see a repeat of what we saw in April, this inconclusive political paralysis which gripped the market for a couple of months until we started to see some sort of positive signs that the Italians are working together in order to form a viable government. But that's not the case, it's very fragile out there and I think that's going to really hit sentiment going forward.'

JOURNALIST: 'Speaking of sentiment, let's just go back to the US again. If we do have a shutdown, what could it cost the US economy? '

ISHAQ SIDDIQI: 'Well the FT's said something around, put a figure around $8 billion per week. The sequestering cuts themselves haven't had a significant hit on the US economy in the last few quarters. We knew that it's going to start creeping in towards the fourth quarter, the end of the year, are not able to work out a fresh budget to raise the debt ceiling. Potentially, if this goes on for the next seven to eight weeks, we could be looking at somewhere around the region of $40 billion to $50 billion. So really, it's difficult to measure that at this point right now. It would be a significant hit on GDP. Right now, annualized growth is at about 2.5% at a time when the US economy is, here's nascent growth on board. There's tentative signs that we are growing. The last thing we want is anything that will start knocking off the growth level for the US economy and I think the market is going to be extremely worried about that. But at the same time, on a positive - yeah, I'm taking on a positive spin, it is likely that the sequestering cuts will also going to mean that Ben Bernanke doesn't have to cut down quantitative easing anytime soon and that means that liquidity junkie investors are going to continue having QE for a little longer than they expected. '