Dollar weakens as US Federal government 'shut-down' begins

"The US government shut down after a midnight funding deadline as President Donald Trump and Congressional Democrats clashed over health-care spending. With key economic reports on hold, traders fear the loss of visibility will leave markets in the dark on the outlook for monetary policy. The immediate reports at risk are Thursday's weekly jobless claims and the Oct. 3 release of September's nonfarm payrolls. Wednesday's private-sector payrolls data from ADP Research may therefore have added significance."

"The Congressional Budget Office estimates that about 750,000 employees will be furloughed at a cost per day of $400 million in lost compensation. The Trump administration's plan to fire federal workers outright could also drive jobless claims higher at a time when employment already looks fragile. While the next Federal Reserve meeting is still four weeks away, policymakers might have to make decisions on an unclear picture, with the labor market softening and inflation hovering above target."

"Contracts on the S&P 500 fell 0.4pc as traders reduced risk after the benchmark's strongest September in 15 years. Nasdaq 100 futures retreated 0.5%, with tech stocks among the biggest decliners in premarket trading. Nike Inc. rose nearly 4% as its turnaround gained traction. Gold neared $3,890 an ounce to sustain a record-breaking rally. The dollar extended its slide for a fourth day. Treasuries rose across the curve, with the 10-year yield falling two basis points to 4.13pc."

Contracts on the S&P 500 fell 0.4pc as traders reduced risk after the benchmark’s strongest September in 15 years. Nasdaq 100 futures retreated 0.5%, with technology stocks among the largest premarket decliners, while Nike Inc. rose nearly 4% amid a turnaround. Gold neared $3,890 an ounce, sustaining a record-breaking rally, and the dollar extended its slide for a fourth day. Treasuries rose across the curve, with the 10-year yield falling to 4.13pc. The US government shut down after a funding deadline amid clashes over health-care spending, putting key economic reports at risk and complicating the Fed’s data-dependent outlook. CBO estimates suggest large furloughs and daily compensation losses, and a softer labor market with inflation above target makes a rate cut more likely, though uncertainty could increase volatility.

Read at Irish Independent