INTERNATIONAL
Asian shares, gold rise on US shutdown watch; crude falls
A man walks past a stock quotation board showing the Nikkei share average outside a brokerage in Tokyo, Japan. - REUTERS/Filepic
TOKYO: Shares in Asia edged higher on Tuesday and gold kept up its record ascent as markets weighed prospects for a U.S. government shutdown that would delay the release of closely watched jobs figures.
AI Brief
The Australian dollar added to gains after the central bank held policy rates unchanged, as widely expected. Oil fell on prospects for greater production by OPEC+, while China's manufacturing activity shrank for a sixth month in September.U.S. Vice President JD Vance said the government appeared "headed to a shutdown" after little progress in budget talks between President Donald Trump and Democratic opponents.
A government closure would halt the issue of key employment numbers due this week, putting the spotlight on the Labor Department's JOLTS report on August job openings due later on Tuesday.
"It does look as though markets are bracing themselves for the likelihood that we will see a shutdown," Ray Attrill, the head of FX research at National Australia Bank, said on a podcast.
"If we know we're not going to get the payrolls numbers, it will just shine a brighter spotlight on the numbers that we do have."
MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS rose 0.3%, poised for a gain of 5.3% this month. Japan's Nikkei stock index .N225 added 0.1%, reversing from early losses.
China's blue-chip CSI300 Index .CSI300 rose 0.2%, set for a fifth straight month of gains in its longest such streak since October 2017.
The dollar slid 0.1% to 148.46 yen JPY=EBS after Monday's slide of 0.6%. The euro EUR=EBS was flat at $1.1724, and the Australian dollar AUD=D3 strengthened 0.5% versus the greenback to $0.6605.
SHUTDOWN COULD LEAVE FED WITHOUT KEY DATA
The U.S. JOLTS report is the first of several indicators expected ahead of the September employment report due Friday that is considered key to the Federal Reserve's calculations for the timing of rate cuts.
A protracted government closure could leave the Fed flying blind on the economy when it meets on October 29, however.
Analysts expect JOLTS to show job openings held firm at about 7.18 million in August.
"The most immediate implication for the markets is the shutdown may delay the release of certain data, including the critical non-farm payrolls report," Capital.com analyst Kyle Rodda wrote in a note.
"The primary focus for market participants is currently the path forward for U.S. interest rates, with asset prices being supported by the notion that cuts are coming and they could end up being relatively deep."
Without a deal, a U.S. government shutdown would begin from Wednesday, the same day new U.S. tariffs are set to take effect on heavy trucks, patented drugs and other items.
The White House announced revised tariffs on furniture and cabinets late on Monday that are due to kick in on October 14.
In Asian economic data, China's purchasing managers' index (PMI) rose to 49.8 in September versus 49.4 in August, below the 50-mark separating growth from contraction.
It suggested producers are waiting for further stimulus to boost domestic demand, as well as clarity on a U.S. trade deal.
Data in Japan showed factory output fell more than expected in August.
The Reserve Bank of Australia left its cash rate steady at 3.60%, saying recent data suggested inflation might be higher than forecast in the third quarter and that the economic outlook remained uncertain.
The economic and trade uncertainty was a tailwind for gold XAU=, which reached an all-time high $3,866.99.
Oil stayed weaker due to an anticipated production increase by OPEC+ and the resumption of oil exports from Iraq's Kurdistan region. U.S. crude CLc1 fell 0.6% to $63.10 a barrel and Brent LCOc1 slid to $67.53 per barrel, down 0.7% on the day.
The pan-region Euro Stoxx 50 futures STXEc1 were down 0.09% at 5,525, German DAX futures FDXc1 slid 0.05% to 23,893, and FTSE futures FFIc1 fell 0.11% to 9,350. U.S. stock futures, the S&P 500 e-minis ESc1, were down 0.05% at 6,710.
In cryptocurrencies, bitcoin BTC= was little changed at $114,289.88, while ether ETH= declined 0.7% to $4,200.85.
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AI Brief
- Australia held interest rates steady, boosting the Aussie dollar, while oil prices fell due to expected OPEC production increases.
- China's manufacturing contracted again, and Japan's factory output dropped, signaling regional economic weakness.
- A potential US government shutdown could delay critical job data, affecting Federal Reserve rate decisions and market sentiment.
The Australian dollar added to gains after the central bank held policy rates unchanged, as widely expected. Oil fell on prospects for greater production by OPEC+, while China's manufacturing activity shrank for a sixth month in September.U.S. Vice President JD Vance said the government appeared "headed to a shutdown" after little progress in budget talks between President Donald Trump and Democratic opponents.
A government closure would halt the issue of key employment numbers due this week, putting the spotlight on the Labor Department's JOLTS report on August job openings due later on Tuesday.
"It does look as though markets are bracing themselves for the likelihood that we will see a shutdown," Ray Attrill, the head of FX research at National Australia Bank, said on a podcast.
"If we know we're not going to get the payrolls numbers, it will just shine a brighter spotlight on the numbers that we do have."
MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS rose 0.3%, poised for a gain of 5.3% this month. Japan's Nikkei stock index .N225 added 0.1%, reversing from early losses.
China's blue-chip CSI300 Index .CSI300 rose 0.2%, set for a fifth straight month of gains in its longest such streak since October 2017.
The dollar slid 0.1% to 148.46 yen JPY=EBS after Monday's slide of 0.6%. The euro EUR=EBS was flat at $1.1724, and the Australian dollar AUD=D3 strengthened 0.5% versus the greenback to $0.6605.
SHUTDOWN COULD LEAVE FED WITHOUT KEY DATA
The U.S. JOLTS report is the first of several indicators expected ahead of the September employment report due Friday that is considered key to the Federal Reserve's calculations for the timing of rate cuts.
A protracted government closure could leave the Fed flying blind on the economy when it meets on October 29, however.
Analysts expect JOLTS to show job openings held firm at about 7.18 million in August.
"The most immediate implication for the markets is the shutdown may delay the release of certain data, including the critical non-farm payrolls report," Capital.com analyst Kyle Rodda wrote in a note.
"The primary focus for market participants is currently the path forward for U.S. interest rates, with asset prices being supported by the notion that cuts are coming and they could end up being relatively deep."
Without a deal, a U.S. government shutdown would begin from Wednesday, the same day new U.S. tariffs are set to take effect on heavy trucks, patented drugs and other items.
The White House announced revised tariffs on furniture and cabinets late on Monday that are due to kick in on October 14.
In Asian economic data, China's purchasing managers' index (PMI) rose to 49.8 in September versus 49.4 in August, below the 50-mark separating growth from contraction.
It suggested producers are waiting for further stimulus to boost domestic demand, as well as clarity on a U.S. trade deal.
Data in Japan showed factory output fell more than expected in August.
The Reserve Bank of Australia left its cash rate steady at 3.60%, saying recent data suggested inflation might be higher than forecast in the third quarter and that the economic outlook remained uncertain.
The economic and trade uncertainty was a tailwind for gold XAU=, which reached an all-time high $3,866.99.
Oil stayed weaker due to an anticipated production increase by OPEC+ and the resumption of oil exports from Iraq's Kurdistan region. U.S. crude CLc1 fell 0.6% to $63.10 a barrel and Brent LCOc1 slid to $67.53 per barrel, down 0.7% on the day.
The pan-region Euro Stoxx 50 futures STXEc1 were down 0.09% at 5,525, German DAX futures FDXc1 slid 0.05% to 23,893, and FTSE futures FFIc1 fell 0.11% to 9,350. U.S. stock futures, the S&P 500 e-minis ESc1, were down 0.05% at 6,710.
In cryptocurrencies, bitcoin BTC= was little changed at $114,289.88, while ether ETH= declined 0.7% to $4,200.85.