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

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.

EUR/USD

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

USD/JPY

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

GBP/USD

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