Markets on edge as traders await news on US shutdown; Chinese data matches expectations

<p>It’s now been just over a week since the partial US government shutdown began and as I read through the morning press I’m personally amazed […]</p>

It’s now been just over a week since the partial US government shutdown began and as I read through the morning press I’m personally amazed at the lack of headlines over the crisis as there seems to be total silence from Congress with absolutely no hint of a compromise between the Obama administration and the Congressional Republicans over raising the US debt ceiling. The only glimmer of hope seems to come from the Washington Post, with a suggestion that a short term bill could be passed to temporarily raise the debt ceiling by $1 trillion for a few weeks to ensure the US does not default this month.

The risk of a sudden announcement from Congress on the crisis seems to be keeping the market on the fence as although US growth prospects will be scrutinised, the FX market is struggling to break with tradition and sell dollars in a crisis scenario despite the facts presented.

The Chinese HSBC PMI was released at 52.4, in line with market expectations while a comment from Japanese finance minister Aso suggested the Japanese government should consider reducing its US Treasuries holdings; the FX market remained unmoved.

AUD traded with a slightly positive tone as the September NAB business confidence rose to 12 from 6, which is the highest confidence reading since 2010 and probably reflects the Australian election result.

Today’s data calendar brings us German factory orders this morning where the euro bulls will be looking for continued improvement, supporting the stronger PMI data seen last week.



Supports 1.3535-1.3505-1.3455 | Resistance 1.3590-1.3650-1.3710



Supports 96.70-96.30-95.80 | Resistance 97.30-97.50-98.00



Supports 1.6010-1.5975-1.5950 | Resistance 1.6100-1.6140-1.6185

Build your confidence risk free
Join our live webinars for the latest analysis and trading ideas. Register now

StoneX Financial Ltd (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.

No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.

For further details see our full non-independent research disclaimer and quarterly summary.