Closing Recap 

U.S. stocks finished broadly higher in a quiet session, with technology leading the charge as investors awaited key jobs data and monitored the looming threat of a government shutdown; gold surged to another all-time high, while oil prices plunged nearly 4% on supply concerns. In the currency markets, the U.S. dollar remained subdued and near multi-week lows as investors stayed cautious ahead of the government shutdown deadline, with the Euro finding support above 1.1700 and the Japanese Yen attracting safe-haven bids.

The Asian session was driven by mixed economic signals. Chinese PMI data showed factory activity contracting at a slower pace than expected, while a private survey was more upbeat. In Australia, the RBA held rates at 3.6% but adopted a more hawkish tone on inflation, boosting the Aussie dollar slightly. The BoJ’s meeting opinions revealed a deep hawk/dove divide but had little impact on the Yen, which is gaining on safe-haven flows. Heading into the London open, European indices are slightly lower as traders contend with month-end and quarter-end flows.

Key Takeaways 

• Stocks Hold Near Highs, Await Catalyst: U.S. stocks finished another quiet session with modest gains, holding just below all-time highs as traders await key jobs data and the outcome of government shutdown negotiations. 
• Shutdown Deadline Looms Large: The U.S. government is set to partially shut down at midnight tonight (12:01 a.m. EDT, Oct 1). The 70% probability is the market’s primary focus, weighing on the dollar and threatening to delay key economic data. 
• New Tariffs Announced: President Trump announced fresh tariffs on lumber, timber, and furniture, adding another layer of complexity to the trade landscape.
• Dollar Subdued, Gold Erupts Again: The U.S. Dollar remains weak for a third straight day due to shutdown risk, fueling another explosive rally in Gold, which surged over 1% to settle at a new record high above $3,855. 
• Focus on JOLTS and Shutdown Outcome: With Friday’s jobs report likely to be delayed, today’s JOLTS Job Openings data will be the key labor market release of the week. 
• Major Currencies Consolidate: The Greenback’s weakness has allowed EUR/USD to hold above 1.1700 and GBP/USD to steady, while the safe-haven Japanese Yen is attracting bids, pushing USD/JPY lower. 
• FX Options Expiries: A notable $1.3B in options for EUR/USD are expiring around the 1.1700 level. While month-end flows are likely the more dominant force, this large expiry could act as a support level or a magnet for price during the session.
• Oil Prices Tumble on Supply News: In a sharp divergence, WTI Crude Oil prices plunged nearly 4% after OPEC+ signaled another output increase and Iraq resumed some exports, easing supply fears. 
• Bitcoin Rallies on “Uptober” Hopes: The cryptocurrency is bucking the cautious mood, rallying back above $114,000 as seasonal optimism and signs of “whale” buying lift sentiment

Market Overview

 U.S. equity markets saw a quiet and listless day of trading, with major indices finishing with modest gains as investors took a cautious stance ahead of several significant looming events. The primary focus is the midnight deadline for U.S. lawmakers to reach a funding agreement and avert a partial government shutdown. With prediction markets pricing in a 70% probability of a shutdown, investors are bracing for potential disruptions, most notably a delay in the release of this week’s critical jobs data, including Friday’s Nonfarm Payrolls report. 

Index	Up/Down	% Change	Last
DJ Industrials	68.78	0.0015	46316
S&P 500	17.51	0.0026	6661
Nasdaq	107.09	0.0048	22591
Russell 2000	0.93	0.0003	2435

Despite this uncertainty, stocks remained resilient, holding just off recent record highs. Technology-related names provided much of the support. The day was light on market-moving economic data, but a solid rebound in August Pending Home Sales was a positive note for the housing sector. Overnight, Chinese manufacturing PMI data showed a slower pace of contraction, while a private survey was more upbeat. 

The main action was in the commodity and currency markets. Gold surged to another fresh all-time high, continuing its powerful rally as investors sought safety ahead of the shutdown and positioned for future Fed rate cuts. Conversely, crude oil prices plunged nearly 4% on news that OPEC+ plans further output increases and that Iraqi exports have resumed, stoking fears of a global supply glut. The U.S. dollar remained weak, pressured by the shutdown risk and the market’s conviction that the Fed will continue its easing cycle.

Economic Calendar

Yesterday’s U.S. economic data painted a picture of a strong housing market but weakening manufacturing activity:

• U.S. Pending Home Sales (Aug): Rebounded by a solid +4.0% month-over-month, easily beating the +0.2% forecast as lower mortgage rates attracted buyers. 
• U.S. Dallas Fed Manufacturing Index (Sep): Dropped to -8.7, significantly weaker than expected.

Today is the final day of the month and quarter, meaning rebalancing flows could lead to erratic price action. The shutdown deadline and key U.S. data are the main event:

• 06:00 GMT – Final UK Q2 GDP (Exp: +0.3% QoQ). 
• 07:55-09:00 GMT – German & Eurozone Inflation Data. 
• 14:00 GMT – US JOLTS Job Openings (Jul) (Exp: 7.185M). 
• 14:00 GMT – US Consumer Confidence (Sep) (Exp: 96.0). 
• Midnight (04:01 GMT) – U.S. Government Shutdown Deadline.

Commodities, Treasuries and Currencies 

Gold prices surged to a new record high, with the December futures contract gaining $46.20 (+1.19%) to settle at a fresh all-time high of $3,855.20 per ounce. Commodities are telling two different stories. Gold is on an unstoppable tear, surging another 1.2% to settle at a fresh all-time high of $3,855.20. The precious metal is now on track for its best year since 1979. The precious metal is poised for its best month since 2008, driven by expectations of lower interest rates and significant safe-haven demand. Conversely, Crude oil prices slumped on Monday, with WTI falling $2.27 (-3.45%) to settle at $63.45/bbl. The drop was attributed to plans for another OPEC+ output increase and the resumption of Iraqi Kurdish oil exports, which raised global supply outlook concerns. 

Asset	Up/Down	Unit / % Change	Last
WTI Crude	-2.27	USD/bbl	63.45
Brent	-2.16	USD/bbl	67.97
Gold	46.2	USD/oz	3855.2
EUR/USD	0.0023	USD	1.1724
USD/JPY	-0.95	JPY	148.55
10-Year Note	-0.046	%	0.0414

In the currency markets, the U.S. Dollar Index (DXY) remained subdued, trading around 97.90 pressured for a third straight session as traders stayed cautious due to the looming government shutdown. This has allowed EUR/USD to find support above 1.1700, though it faces resistance. GBP/USD is trading quietly around 1.3440 ahead of UK GDP data. The safe-haven Japanese Yen is a notable outperformer, with USD/JPY sliding towards the 148.00 handle as investors seek refuge from U.S. political uncertainty.

U.S. Treasury yields declined, with the 10-year yield falling over 4 basis points to 4.14%, as investors sought safety ahead of the shutdown deadline and priced in dovish Fed expectations. Bitcoin rebounded, rising above $114,000, driven by seasonal “Uptober” optimism and signs of renewed buying by large holders.

Looking Ahead 

The market is entirely focused on developments in Washington regarding the government funding bill, with a shutdown expected at midnight if no deal is reached. This would likely delay the release of Friday’s critical jobs report and increase market uncertainty. This uncertainty is currently weighing on the dollar and supporting gold. The market reaction will depend on whether a last-minute deal is reached. Speeches from a multitude of Fed and ECB officials today will also be closely watched for any shifts in tone. With the NFP report in jeopardy, today’s JOLTS Job Openings data becomes the market’s most important read on the U.S. labor market this week. A significant deviation from the 7.185M forecast could spark volatility.

Today’s session will be heavily influenced by rebalancing flows, which can cause unpredictable and sharp moves in currency markets, often divorced from the day’s news. Be wary of erratic price action, particularly around the London fix (16:00 GMT).