UPDATE 1-Cost of insuring against US default contracts further on debt bill hopes

"We suspect these fears are likely overdone," wrote Karl Schamotta, chief market strategist at Corpay in Toronto.

"Although there are some procedural landmines ahead that could impact the final wording, the impact on spending associated with the so-called 'Fiscal Responsibility Act' should be almost unnoticeable from a macroeconomic standpoint, leaving the government's biggest outlays essentially unchanged," Schamotta said.

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