30/09/2025 - 06:58 UTCThe USDX closed 0.20% lower on Monday, as market focus remained squarely on the political brinkmanship in Washington to avert a government shutdown. Attention is fixed on the Tuesday deadline for Congress to pass a stopgap funding bill, with a failure to act risking the 15th partial shuttering of the US government since 1981. Congressional leaders are scheduled to meet with President Donald Trump on Monday to discuss the issue. This political impasse has created worries that a shutdown could delay the publication of key economic data, including Friday’s highly anticipated Nonfarm Payrolls (NFP) report. Economists anticipate the US added 51,000 roles in September, with the unemployment rate holding at 4.3%. While a strong NFP report could spur the Federal Reserve to roll out future rate cuts at a more measured pace, policymakers continue to prioritize supporting the slowing employment situation over sticky inflation, with traders currently pricing in roughly 40 basis points of Fed easing by the end of 2025.
In other news, Gold prices hit a record high above $3,800 per ounce as safe-haven demand was boosted by the concerns over a potential U.S. government shutdown.
As of 05:10 AM GMT on Tuesday, most Asian stocks kept to a slim range. Chinese shares were generally muted as investors gauged mixed business activity readings. The China SSE and China SZSE both rose 0.35%, while the Hong Kong 50 slipped 0.30%. Trading volumes were low ahead of the week-long National Day holiday, which is set to begin on Wednesday. The muted price action came despite government purchasing managers index data showing manufacturing activity shrinking for a sixth consecutive month, contrasting sharply with private readings that showed manufacturing activity expanding at its sharpest pace in six months. The sustained weakness in government PMIs may prompt Beijing to issue more stimulus measures.
In Japan, the Japan 225 fell 0.10%, while the Japan 100 edged up 0.20%. Japanese shares faced pressure from the yen’s resilience, which hurt export-heavy sectors. Weak Japanese industrial production and retail sales data for August missed expectations, sparking concerns over a sluggish economy. However, this weakness could also delay any further interest rate hikes by the Bank of Japan.
The main US equity indices moved higher on Monday, fueled by a continuing recovery in tech stocks. However, concerns over a looming U.S. government shutdown limited any major gains, and sentiment was further pressured by U.S. President Donald Trump's announcement of more trade tariffs, this time targeting lumber and wood products. Investor focus remains fixed on the release of a key jobs report later this week and the implications of a looming federal government shutdown.
Among individual stocks, the chipmaker Nvidia climbed 2.08% as it continued its recovery from a recent rout. Videogame developer Electronic Arts surged 4.56% after agreeing to a take-private deal worth approximately $55 billion. Conversely, shares of cruise operator Carnival declined 4.02%, despite the company having lifted its annual profit forecast for the third time this year. Additionally, cannabis stock Tilray skyrocketed over 60% higher on Monday. The cannabis producer, which holds a market capitalization of $2.02 billion, has demonstrated impressive momentum over recent months, reaching a significant milestone with annual revenues totaling $821.31 million and an associated growth rate of 4.1%.
The euro advanced modestly against the US dollar on Monday, holding above 1.1720 as political tensions in Washington weighed on market sentiment.
The US dollar came under pressure against most G10 peers as negotiations over government funding stalled. President Donald Trump met with Democratic leaders from both chambers, but Senate Majority Leader Chuck Schumer emphasized “large differences,” while House Democratic Leader Hakeem Jeffries rejected a partisan Republican proposal, citing concerns over healthcare.
Economic data in the US added to the market narrative. Pending home sales rebounded strongly in August, rising 4% month-on-month and easily surpassing expectations of a 0.3% increase. Last week’s core PCE inflation figures were in line with forecasts, reinforcing the case for additional Fed easing later this year.
In the Eurozone, consumer confidence edged higher in September, improving to -14.9 from -15.5, though it remained below the long-term average. Industrial confidence slipped slightly to -10.3 from -10.2, while services sentiment weakened to 3.6, missing consensus forecasts. The modest improvement offered limited support to the shared currency.
This week’s focus will shift to key US labor market releases, including ADP employment data, the ISM Manufacturing PMI, weekly jobless claims, and Friday’s Nonfarm Payrolls report.
Gold surged to an all-time high on Monday, with spot prices breaking above $3,800 an ounce as mounting concerns over a potential US government shutdown, expectations of Federal Reserve rate cuts, and geopolitical tensions fueled demand for safe-haven assets.
Safe-haven demand focused on the potential US government shutdown is one of the driving factors behind gold’s rally.
Geopolitical risk added another layer of support, after Russia’s defense ministry reported control of a village in Ukraine’s Donetsk region.
Gold has already gained more than 43% this year, benefiting from expectations of lower US rates and global uncertainty. Last week’s core PCE inflation data came in line with forecasts, reinforcing bets on potential Fed cuts in October and December.
Oil prices retreated sharply on Monday, sliding around 3% as expectations of higher supply weighed on the market. Plans for another OPEC+ production increase in November and the resumption of crude exports from Iraq’s Kurdistan region via Turkey fueled concerns over a looser supply outlook.
The producer group is set to meet on Sunday, with sources indicating members are likely to confirm a production boost of at least 137,000 barrels per day for November. Despite undershooting output targets by nearly 500,000 bpd, OPEC+ is seen shifting focus toward defending market share.
Crude flows from Iraq’s semi-autonomous Kurdistan region to Turkey resumed on Saturday for the first time in two and a half years, according to Iraq’s oil ministry.
The resumption of Kurdish exports follows last week’s rally, when both crude benchmarks gained more than 4% after Ukrainian drone strikes disrupted Russian energy infrastructure. Meanwhile, Russia launched one of its most sustained barrages on Kyiv since the war began in 2022.
Separately, US President Donald Trump said on Monday it was time for Hamas to accept a 20-point peace plan agreed with Israeli Prime Minister Benjamin Netanyahu on Gaza’s future.
US equities advanced on Monday, lifted by a rebound in tech shares led by Nvidia, as investors looked ahead to this week’s nonfarm payrolls report and monitored political wrangling in Washington over government funding.
The moves followed a week in which all three benchmarks ended lower, snapping multi-week winning streaks despite broadly in-line US inflation data.
Markets are turning their attention to Friday’s September employment report, expected to show payroll gains of around 51,000 after August’s 22,000 increase, with unemployment holding steady at 4.3%.
Uncertainty looms, however, as a potential government shutdown could delay the release of labor market data. Lawmakers face a Tuesday deadline to pass a stopgap funding bill. While Republicans hold both chambers of Congress, bipartisan support is required, and Democrats have so far rejected the GOP’s proposal. President Donald Trump met congressional leaders Monday in a bid to secure a deal.
In corporate news, Nvidia rose 2% as the chipmaker extended its recovery after last week’s steep losses. Electronic Arts surged more than 4% after agreeing to a $55 billion take-private deal with private investors.
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