It may be non-farm payrolls week on the economic calendar, but perhaps that might get taken away. And that is the significance of the potential impact that could arise from a US government shutdown this week. For some context, the US federal fiscal year runs from 1 October to 30 September and government funding is allocated on a year by year basis according to this date. In total, Congress must pass 12 separate appropriation bills by 1 October. So only agencies with appropriation bills that are passed will be able to operate while those without will be forced to shut down.Typically, this is the usual game of chicken that we’re used to seeing but it eventually gets done. So, is this time any different?As much as politicians like to be dramatic and make a big deal about everything, my take is that all of this will get done one way or another – as it always has. If push comes to shove, Congress could just avert a shutdown by passing a continuing resolution. That just buys them more time to get the bills passed. So, no biggie.Polymarket currently has odds of a shutdown at 72% but that is down slightly from before the weekend at around 83%. It’s still a high number but again, politicians just love a good game of chicken right up until the last second.However, what if a US government shutdown really does happen? What will be the impact to markets?The way I see it is that a shutdown is mostly an operational disruption rather than an economic one. Unless it leads to permanent layoffs of some sort, then there might be more impact for markets to digest. Otherwise, it’s all just going to be temporary. As such, the impact to markets is arguably going to be minimal; if not hardly felt.In fact, BofA estimates that any major shutdown would only subtract 0.1% from economic growth for every week it lasted.So, why is the operational disruption a key risk event for markets then?The thing is if we do get a shutdown on 1 October, that will delay the key economic releases that we will be getting this week. The BLS and Census Bureau are not part of the list of ‘essential operations’ during a shutdown, so they won’t be working.And that means the weekly initial jobless claims as well as the non-farm payrolls data this week could very well be delayed to a further date. In the grand scheme of things, it shouldn’t be too consequential as the data will still be the data. However, it could very well stir up some nervousness in markets with the potential for the CPI data in mid-October to be delayed as well.So, that’s the key risk in scrutinising the US government shutdown that could happen this time around. And that being how these data delays might feed into the Fed decision at the end of October. This article was written by Justin Low at investinglive.com. Source: investinglive.com (Read Full Article)

We’re seeing price now break $3,800 as gold jumps up by over 1% on the day. The precious metal is now up a little over 10% this month and is poised for its best monthly showing since July 2020. Up, up, and away! Again, there’s not much else that hasn’t been said already. From before: Gold looks poised to close out September in style This article was written by Justin Low at investinglive.com. Source: investinglive.com (Read Full Article)

There is arguably just one to take note of on the day, as highlighted in bold below.That being for EUR/USD at the 1.1750 level. The expiries rest in between the 100 and 200-hour moving averages of 1.1737 and 1.1765 respectively. So, that could help to play a role in terms of limiting any upside extensions on the session alongside the key near-term technical levels above. But given the state of play, I’d wager more importance of the technicals than the expiries above. The pair is weakening back to start the week, continuing the bounce on Friday in trying to erase last week’s drop.That as month-end flows will also be part of the picture in the next two days. Here’s the take on that by BofA and this one by CACIB.For more information on how to use this data, you may refer to this post here.Head on over to investingLive (formerly ForexLive) to get in on the know! This article was written by Justin Low at investinglive.com. Source: investinglive.com (Read Full Article)

Data shows Japan is steadily moving towards achieving 2% inflation targetThat means need for policy adjustment is heightening more than everEconomy, prices still face downside risks but upside risks have become more importantCurrent high inflation is probably due to a major shift in firms’ price and wage-setting behaviourRigidity of services prices is gradually weakening, likely to continueThe key would be whether this trend would expand to smaller and medium-sized firmsThe comments here are slightly hawkish at the balance especially considering that Noguchi is typically one of the more dovish members. Is there a change afoot at the BOJ after the latest dissents by Takata and Tamura? It will be interesting to keep monitoring these remarks in the next few weeks. This article was written by Justin Low at investinglive.com. Source: investinglive.com (Read Full Article)

The main agenda of the gathering will be discussing the draft of China’s next five-year plan, which will involve everything and anything related to the country’s economic, political, and social goals.For some context, China’s 14th five-year plan is currently in its final year and so the 15th one will cover the period of 2026 to 2030. This plan will have to be endorsed by a plenary session before being submitted to the annual legislative session in March next year for final approval. It’ll be interesting to see if we do get any mentions on how they want to approach the trade conflict with the US, besides the domestic stuff that is. This article was written by Justin Low at investinglive.com. Source: investinglive.com (Read Full Article)

There’s going to be some spicy stuff on the agenda this week but just be aware that market flows and price movements might not follow that completely in the day(s) ahead. Month-end and quarter-end is upon us and that presents its own set of challenges in reading into price action sometimes amid rebalancing flows. Typically, these tend to hit in the run up to the London fix but they can also transpire during the day. So, just stay alert.From last week: Dollar flows set to lean more neutral this month-end – BofA | Moderate dollar selling the signal for this month-end – Credit Agricole This article was written by Justin Low at investinglive.com. Source: investinglive.com (Read Full Article)

Prior +2.7%HICP +3.0% vs +3.0% y/y expectedPrior +2.7%The headline estimates might be a little higher than in August but core annual inflation is seen easing just a touch from 2.4% to 2.3%. So, the ECB can take comfort in that but they won’t quite feeling the urgency just yet unless we see more positive signals on prices in the likes of Germany especially. This article was written by Justin Low at investinglive.com. Source: investinglive.com (Read Full Article)