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(Bloomberg) -- The potential for a U.S. govt shutdown reemerged as a key risk across markets after President Trump suggested Tuesday night that he’d veto a Congressional spending bill needed to keep the government open, unless it included funding for his proposed border wall. Such a move would buoy Treasuries, while negatively impacting the dollar, analysts said. Fitch Ratings warned that the U.S.’s credit rating may be in jeopardy. KEY VIEWS

• BMO Capital Markets (strategists Ian Lyngen and Aaron Kohli, in note)
  • Lead-up to govt shutdown toward end of September could drive 10-year yield below 2 percent
  • “What is more important isn’t whether or not there is a government shutdown, per se, but rather how aggressively the threat of one is used in the rhetoric in the run-up to the deadline”
  • A BMO survey earlier this month found 77% of clients expected a govt shutdown to spur a Treasuries rally, with an estimated 13bps decline in 10-year yields
• NatWest Markets (John Briggs, head of strategy in the Americas, in phone interview)
  • Shutdown would likely be bond positive, risk-asset negative, and dollar negative
  • 10Y yield could move below 2% should debt ceiling become an issue; fears of a debt ceiling breach would drive market more than govt shutdown concerns
  • “You’re going to have dislocations in the bill market around the drop-dead date because money funds won’t be able to hold those securities, and anything with a coupon due in those days will be tricky”
• Brown Brothers Harriman & Co. (Marc Chandler, head of currency strategy, in note)
  • Trump’s remarks were “unsettling”
  • “Government shutdowns are not unprecedented in the U.S., of course, and they typically are mildly disruptive. They are not good for the investment climate”
  • Connecting govt shutdown to debt-limit fight would heighten the stakes; “missing a debt payment is considerably more serious and one that -- in this game of brinkmanship largely within the Republican Party -- neither side seems to want to risk”
• Hoisington Investment Management (chief economist Lacy Hunt, in Bloomberg Television interview)
  • “Government shutdowns, if they last, they’re very short affairs. It would be really very difficult for it to go on very long”
  • “Treasury market is extremely volatile over the near term”; ultimately, long-term yields are headed lower, regardless of shutdown
  • “Rates cannot stay up. The economy is just too fundamentally weak”

--With assistance from Brian Chappatta, Lananh Nguyen and Elizabeth Stanton. To contact the reporter on this story: Katherine Greifeld in New York at kgreifeld@bloomberg.net To contact the editors responsible for this story: Boris Korby at bkorby1@bloomberg.net Vivien Lou Chen