Global Markets Surge Amid U.S. Shutdown Turmoil
Global stocks rallied while gold neared record highs as investors anticipated U.S. government shutdown effects, weakening the dollar. Concerns over disrupted economic data releases and Federal Reserve rate cuts loomed. European stocks hit highs amid U.S. institutional credibility worries, with implications for Treasury yields and commodity markets also noted.
Amid the looming threat of a U.S. government shutdown, global stocks gained traction and gold traded close to record levels as investors assessed the possible impacts. A key concern is the disruption of critical economic data releases, notably on employment and inflation, potentially hindering the Federal Reserve's rate decisions.
The labor market report from ADP, indicating unexpected job losses in September, is taking precedence over monthly payroll data now unlikely to be released, pushing traders to factor in two Federal Reserve rate cuts by year-end. This was echoed by Kevin Thozet from Carmignac, emphasizing the urgency of resolving the shutdown.
Uncertainty about U.S. institutions has weighed on the dollar, while European stocks reached new peaks and Wall Street futures advanced. The expectation of Fed rate cuts alongside shutdown concerns bolstered gold to a new high, and tech shares in Asia surged, driven by South Korean chipmakers' partnerships with OpenAI.
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