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Morning bid Europe-Politics dominate the markets from Japan stocks to Bitcoin

Kevin Buckland gives us a look at what the future holds for European and global markets.

The global markets were firmly in control of politics on Monday. This was not least because the right-wing fiscal dove Sanae Takayi won a weekend surprise victory that will make her Japan's first woman prime minister.

In the first few minutes of trading, Nikkei broke through several psychologically significant levels and reached a new all-time record not far off 48,000. The long-dated bond rates, on the other hand, rose to just below record highs due to concerns about the country's finances.

The yen fell to a record low against the euro and short-dated yields dropped sharply on the speculation that Takaichi would pressure the Bank of Japan into delaying further rate increases.

Gold extended its record rally, reaching just $75 shy of $4,000 an ounce. Bitcoin soared to $125,000 on Sunday for the first.

The U.S. Government Shutdown is the ostensible cause. It is proving to be a long-term affair. Another vote failed on Friday in the Senate, and Republican President Donald Trump has threatened to cut more funding to Democratic States and to fire more federal employees.

Takaichi’s rise could be the reason for record gains in alternative assets. Faith in fiat currencies, already battered from the White House’s active pursuit of a lower dollar, has taken another hit. JPMorgan refers to it as the "debasement trading".

Futures are currently flat, making it difficult to predict what the future holds for European stocks. They have already reached record highs.

Most major Asian markets were closed or had a thinner crowd than usual today.

Mainland China is closed, as are Taiwan and South Korea, and Hong Kong's trading takes place between the weekend, and a Tuesday holiday.

The Australian markets are open today but the majority of states and territories, including New South Wales, have a holiday.

The only data available for Europe is the regional construction PMIs.

The central bankers are not lacking, with ECB president Christine Lagarde as well as Bank of England chief Andrew Bailey both speaking at different venues.

The Kansas City Fed's Jeffrey Schmid will also be speaking.

Market developments on Monday that may have a significant impact

European construction PMIs for September

-Euro-area retail sales (Aug)

-ECB president Lagarde speaks at Strasbourg, ECB vice-president de Guindos, and Bank of Spain governor Escriva, speak in Madrid. ECB chief economic economist Lane, speaks at Frankfurt

Governor Bailey of the BoE speaks at Edinburgh

Kansas City Fed President Schmid to speak in Kansas City

U.S. Government Shutdown

(source: Reuters)