The USD is mixed with the USD lower vs the EUR and GBP by higher vs the JPY as the market reacts to the potential reopening of the US government. IN the video above I take a look at those three currency pairs - the EURUSD, USDJPY and GBPUSD - from a technical perspective.
Looking at other currency pairs, the AUDUSD, NZDUSD and USDCAD are all showing dollar weakness/currency strength as the market reacts with risk-on flows.
Of course, the clock is ticking to the Thanksgiving Day holiday and absolute chaos forecast for airlines (it is already a mess). SNAP payments remain a concern for a large swatch of the population and farmers are getting more and more disenchanted as well. All of which is tilting the government to some sort of agreement to end the U.S. government shutdown. As such, the Senate advanced a measure to resolve the impasse, paving the way for House approval.
Markets are reacting with Treasury yields rising by 3-4 basis points, and stock futures in premarket trading rising with the Nasdaq leading with a gain of 350 points.
Gold is higher by $95 or 2.38% to $4095. Silver is up $1.75 or 3.63% to $50.07. Bitcoin is higher by $1.297 to $106.011.
Once the government reopens, delayed economic reports—starting with the September employment data—are expected to be released, offering key input for the Fed’s December rate decision.
The reopening will also allow federal workers to receive back pay and ease the dreaded disruptions ahead of the Thanksgiving travel season.
Trump said over the weekend, that most American could get $2000 in a payback from the tariffs collected.
From central bankers over the weekend.
The Bank of Japan’s October meeting summary showed growing support for a near-term rate hike, with most policymakers seeing tightening as appropriate if wage growth holds and global conditions remain stable. Eight of thirteen opinions favored a hike soon or outlined conditions for one, and two board members even dissented in favor of raising rates to 0.75%. Governor Ueda urged patience, saying more data is needed to confirm that firms will sustain wage gains despite external pressures. Overall, the BOJ is becoming more confident about normalizing policy but remains cautious about timing, focusing on verifying wage momentum before moving.
BOJ policy board member Junko Nakagawa said the Bank expects to continue gradually raising rates as Japan’s economy and prices improve but will proceed cautiously given global uncertainties. She highlighted that inflation expectations are rising toward the 2% target, supported by resilient corporate investment and wage growth, though higher prices are straining consumer sentiment. Nakagawa warned that persistent cost pressures could dampen demand and profitability, but overall, medium- to long-term inflation expectations remain firm. Her comments underscored the BOJ’s data-dependent approach in determining whether inflation is driven by sustainable wage dynamics or short-term factors.
RBA Deputy Governor Hauser said Australia’s monetary policy faces an unusual challenge, noting that GDP recovery began last year with demand slightly exceeding potential output. He emphasized that achieving the inflation target will require maintaining a restrictive stance to narrow the output gap. Hauser added that the economy has avoided the worst-case scenarios, with rate cuts expected to aid growth from late 2025, and highlighted the need to boost productivity through greater investment in new capacity.
ECB Vice President Luis de Guindos said the central bank believes current interest rates are appropriate, though adjustments could be made if inflation trends or policy transmission change. He noted that services and wages are progressing in the right direction but stressed the need for prudence in policy decisions despite reduced uncertainty. Overall, his remarks reaffirm that the ECB is likely to maintain its current stance through the end of the year.
Fed’s Daly (2027 voter, dovish) said policymakers should stay open to further rate cuts while remaining alert to inflation risks, noting that productivity gains could support faster, non-inflationary growth. She added that tariff-driven price increases have not broadened into overall inflation, and the balance of risks has shifted due to a weakening labor market. Daly attributed slower job growth to declining worker demand, acknowledged that inflation has fallen but remains elevated, and described current monetary policy as still modestly restrictive.
Geopoliticallly, Russia continues its attack on Ukraine with force. Russia says it remains open to resolving the conflict through diplomacy but the situation is stuck
