- With a U.S. government shutdown looming, global markets showed signs of caution: equities slipped, the U.S. dollar weakened broadly, and gold spiked to new highs (briefly hitting about $3,820/oz).
- A shutdown would delay or suspend the release of key economic indicators, including the upcoming monthly employment report and inflation data, complicating the Federal Reserve’s ability to make informed decisions.
- In such a scenario, the Fed might be “flying blind,” lacking fresh data for its late-October meeting, which raises uncertainty about the path of monetary policy.
- On the markets: European stocks dipped modestly, Japan’s Nikkei fell, while broader Asia ex-Japan and Chinese indices posted gains.
- The dollar’s weakness was seen against major currencies (yen, euro, etc.), and gold’s rally reflected flight-to-safety flows amid uncertainty.
- Additional pressures include the planned imposition of new U.S. tariffs in early October on trucks, drugs, and furniture, which may add volatility.
Global Markets Turn Cautious as U.S. Shutdown Risk Grows
Source: reuters.com
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