A few hours ago US President Trump signed into law a bill resolving the longest US Federal Government shutdown in history, leading to further gains in stocks, precious metals, and the US Dollar.
The longest US government shutdown ever finally ended some hours ago as the House of Representatives followed the Senate's lead in voting for a compromise solution. The shutdown was beginning to meaningfully affect the US economy, due mainly to causing serious flight delays and cancellations. The compromise resolution was expected and seemed to be having an effect in improving risk sentiment in the market, and this has continued since the Government officially reopened. It is unlikely that the highly important US CPI (inflation) data scheduled for release today will be released however, so it seems likely that the risk rally will continue today as there is nothing obvious on the table to potentially sour the mood.
Global stock markets are on average little changed, but US and European markets are advancing.
The S&P 500 Indexis within sight of its record high and has gained for four consecutive days, while
the NASDAQ 100 Indexhas not performed as bullishly, suggesting the broader economy is benefiting more in the current rally than the tech sector.
Bad news in the UK, as GDP month-on-month data showed the economy contracting slightly, while it had been expected to remain unchanged. The difference is very marginal, but might have some psychological significance.
In the Forex market, t
he USD/JPY currency pairseems to be following through on its recent bullish breakout, touching the big round number at ¥155, pushing higher on improving risk sentiment, which has caused funds to flow out of the safe-haven Japanese Yen and into the US Dollar. Trend traders will be long of this currency pair. Since today's Tokyo open, the best performing major currency has been the Australian Dollar, while the New Zealand Dollar has been the weakest.
- The CME FedWatch tool
shows a major reduction in the market's implied probability pricing that the Fed will cut rates at its next meeting in December, from 63% to only a 53% probability, making it effectively a toss-up. This can be expected to strengthen the US Dollar and consolidate its new long-term bullish trend.
Crude Oil has begun to consolidate after falling 4% yesterday as it became clear that oversupply has caused a glut.
- Bitcoin
and other cryptocurrencies are gaining on the risk-positive sentiment, but are mostly still well within bearish chart patterns, so crypto bulls should probably remain cautious, unless they are long-term investors with a good case on a particular coin.
The Australian Unemployment Rate fell by more than expected, from 4.5% to 4.3%.
There are no more high-impact economic data releases scheduled for today, but markets seem to have reasonable volatility anyway so it looks like an OK trading day