Market sentiment remained mixed early Thursday as concerns over upcoming U.S. data releases and economic inactivity from the government shutdown coincided with the Jewish holiday.
Weaker-than-expected U.S. employment signals, a slight improvement in the ISM Manufacturing PMI, and cautious remarks from Federal Reserve Bank of Chicago President Austan Goolsbee added to the uncertain risk tone. Goolsbee said he is starting to worry about rising inflation, suggesting the Fed may remain cautious going forward.
Despite the rising policy uncertainty, Fitch Ratings reaffirmed the U.S. credit rating at AA+/Stable, noting that the government shutdown doesn’t have near-term implications for the rating. Equities rose as markets remained hopeful that lawmakers would resolve the budget impasse soon.
In terms of economic data, the September ADP employment report showed a surprise decline of 32,000 jobs, well below the expected gain of 50,000, marking a three-month low. On the other hand, the ISM Manufacturing PMI rose to 49.1, slightly better than the 49.0 forecast, reaching a seven-month high. The final reading for the S&P Global Manufacturing PMI came in at 52.0, matching the preliminary figure. The Atlanta Fed’s GDPNow model trimmed its Q3 growth estimate from 3.9% to 3.8%, but with future data disrupted by the shutdown, visibility is expected to worsen.
On the political front, Trump repeated that the shutdown is a good opportunity to cut costs, saying "billions of dollars can be saved." Reports indicate the White House is preparing federal agencies for mass layoffs. Trump also aims to cancel federally funded western hydrogen hubs, which were part of a clean energy initiative under the Biden administration. Bloomberg reported that the administration may defund these projects, which Trump considers wasteful spending.
The Supreme Court declined to immediately allow Trump to fire Federal Reserve Governor Lisa Cook but confirmed it will hear arguments in January, with a decision expected afterward. The court's docket is filling up, with a significant tariff case scheduled for argument in November.
Geopolitical tensions continue to rise. Reports indicate that Ukraine is likely using U.S. long-range missiles to strike deep into Russian territory, damaging key energy infrastructure. U.S. officials confirmed they will now provide Ukraine with intelligence to support such long-range strikes, a notable escalation in military assistance.
At the same time, the G7 (Group of Seven) vowed to increase enforcement of sanctions against Russia. In a statement, the group said it will work to phase out remaining Russian imports, including hydrocarbons, and warned of penalties for third-party countries and firms that help finance Russia’s war effort. The G7 emphasized the importance of tariffs, import bans, and export restrictions as tools to cut Russian revenue, and said it is seriously considering restrictions on financial enablers outside Russia.
USDJPY bounced off a two-week low, snapping a four-day losing streak. This came amid rising speculation about an October rate hike from the Bank of Japan and softer demand for Japanese Government Bonds (JGBs). The latest 10-year JGB auction saw the bid-to-cover ratio fall to 3.34, down from 3.92 in September, indicating weaker investor appetite as yields hover near multi-year highs and political uncertainty looms ahead of Saturday’s leadership election.
The Reserve Bank of Australia (RBA), in its October 2025 Financial Stability Review, flagged external financial risks and warned against loosening housing credit amid record-high property prices. Australia’s August 2025 trade balance came in at 1,825 million, far below the expected 6,500 million and the prior figure of 7,310 million.
In Canada, the S&P Global Manufacturing PMI for September declined to 47.7 from 48.3. Minutes from the latest Bank of Canada (BOC) meeting showed members agreed that inflation indicators are moving toward the 2.5% target.
Against this backdrop, the U.S. Dollar Index (DXY) remains lackluster after a three-day losing streak, while Gold dribbles after hitting a record high the previous day. Meanwhile, USDJPY bounces off a two-week low to snap a four-day losing streak amid mixed concerns about the BoJ and a softer demand for Japanese Government Bonds (JGB) in today’s 10-year bond auction. Meanwhile, Antipodeans also stall their downside amid China holidays and mixed risk news.
In commodities, crude oil prices rebounded from a four-month low, ending a four-day losing streak. Gold slipped after touching a record high the day before. In cryptocurrencies, Bitcoin (BTC) rose to a seven-week high, while Ethereum (ETH) also gained, building on the previous day’s rise. However, corporate demand for Bitcoin is fading. According to K33 Research, the pace of company purchases dropped to the lowest level since April, after a surge in crypto-treasury strategies earlier in 2025.
U.S. stocks recovered from a 0.4% loss to finish with a 0.4% gain. The Dow Jones Industrial Average rose 43.21 points or 0.09% to close at 46,441.10. The S&P 500 gained 22.74 points or 0.34% to a record high of 6,711.20, and the NASDAQ Composite advanced 95.15 points or 0.42% to 22,755.16.
Health care stocks outperformed after Donald Trump suggested he would negotiate pharmaceutical imports rather than impose tariffs. Eli Lilly (LLY), Merck (MRK), and Pfizer (PFE) all gained more than 7%.
Nike posted better-than-feared quarterly sales and rose accordingly. Intel also rallied after proposing a foundry collaboration with Advanced Micro Devices (AMD).
EURUSD stays flat after a muted session that ended a three-day losing streak, as traders digested a mixed European Union inflation report, cautious sentiment driven by the U.S. government shutdown, varied European Central Bank (ECB) comments, and rising concerns over the Ukraine-Russia conflict. GBPUSD, meanwhile, pauses its four-day winning run, weighed down by conflicting remarks from Bank of England (BoE) officials and broader market unease.
Despite the Japanese Yen’s haven appeal and weakness in the U.S. Dollar, the USDJPY pair bounced from a two-week low, posting its first daily gain in five days. This move is likely tied to weaker demand for Japanese Government Bonds (JGBs). The recent 10-year JGB auction showed the bid-to-cover ratio dropped to 3.34 from 3.92 in September. This reflects uncertainty about the Bank of Japan’s (BoJ) potential rate hike, cautious sentiment ahead of Saturday’s Japanese Prime Minister selection, and mixed risk flows.
The Reserve Bank of Australia’s (RBA) October Financial Stability Review did little to stop AUDUSD’s five-day rally, supported mainly by a weaker U.S. Dollar, mixed updates from China, and the RBA’s decision to hold rates earlier this week. NZDUSD followed a similar pattern, with no major news from New Zealand. Meanwhile, USDCAD rose for the third straight day, ignoring a rebound in crude oil prices and Canada’s key exports. The Canadian dollar remained pressured by disappointing manufacturing PMI and housing data, concerns over slowing inflation, weaker economic activity, and ongoing trade tensions between the U.S. and China.
WTI crude oil bounced from its lowest level since late May, ending a four-day losing streak, despite U.S. weekly official inventories showing a build in stockpiles. The rebound is likely due to traders positioning ahead of this weekend’s OPEC meeting amid growing fears of a supply crunch, as there are no major updates on the Hamas-Israel peace talks and increasing global calls for stronger action to curb Russia’s influe
e.
Gold prices hit a new all-time high near $3,795 and edged higher around $3,770 early Thursday. The cautious market mood and weaker U.S. Dollar are driving demand for bullion. However, holidays in China, a major gold consumer, and the likely absence of fresh economic data are limiting gold’s recent movements.
Bitcoin climbed to a seven-week high before pulling back today, while Ethereum extended its gains for a second day, reaching a 10-day high. The moves were supported by technical breakouts and a weaker U.S. Dollar. Equities also edged higher, driven by optimism that policymakers will resolve the U.S. government shutdown and by generally positive corporate news.
Investors have largely looked past the ongoing U.S. government shutdown, expecting it to be resolved eventually. However, with the government closed Thursday for the Jewish holiday, Congress cannot return before Friday, delaying key data releases. Weekly jobless claims will not be published, and the much-anticipated nonfarm payrolls report on Friday is also unlikely to be released.
In the absence of fresh U.S. data, market focus shifts toward Switzerland’s inflation figures and broader global risks. Key drivers now include ongoing developments in the Ukraine-Russia conflict, the Hamas-Israel war, the G7’s push to tighten sanctions on Russia, and political headlines from Donald Trump, particularly around tariffs and fiscal policy.
This environment may keep the U.S. Dollar under pressure, especially if uncertainty around the shutdown drags on. As for USDJPY, the pair could remain volatile amid speculation about a potential Bank of Japan rate hike, political uncertainty in Japan ahead of Saturday’s leadership vote, and shifting demand for Japanese Government Bonds.
May the trading luck be with you!
