According to the materials of the site - By Cointribune EN
Washington, on the verge of a complete shutdown of the U.S. government, is shaking global markets. This Monday, September 29, the budget impasse in the U.S. Congress resurrects the specter of a government shutdown as early as Wednesday, plunging investors and institutions into uncertainty. In an already uncertain environment characterized by central bank fluctuations and instability in American indicators, this political deadlock raises concerns about a serious loss of visibility. Investors are urgently reorienting, switching between fleeing to safe assets and awaiting macroeconomic instability.
As the specter of a federal government shutdown in the USA becomes increasingly apparent, investors cautiously realign their market positions.
The price of gold reached a new historic high of $3819 per ounce, driven by a weakening dollar and growing concerns about the budget impasse in the USA. In this context, preference is given to safe-haven assets, while currencies and stock markets show more moderate dynamics.
Here are the main events observed on Monday, September 29:
Gold: the price of an ounce of gold exceeded the historic maximum, reflecting high demand for hedging amid political uncertainty;
Dollar: the dollar index fell by 0.2% to 97.952. Against the yen, the US dollar decreased by 0.6% to 148.61 yen, erasing part of its growth from the previous week. The euro strengthened slightly, gaining 0.1% to $1.1709, but the currency remains in a low range;
Stock markets: the global MSCI All-World index rose by 0.16%, indicating a cautious reaction from global markets. In Europe, the STOXX 600 index increased by 0.3%, nearing a monthly figure of +1.1%, marking the third consecutive month of growth; Positive seasonality: analysts note that the fourth quarter is historically favorable for stocks, with the S&P 500 index rising in 74% of cases during this period;
Bond yields: the yield on 10-year Treasury bonds stabilized at around 4.16% after rising amid a series of encouraging economic data from the previous week.
These adjustments reflect an atmosphere of vigilance. Therefore, investors prefer a defensive position, anticipating important political decisions in Washington in the coming hours.
The situation regarding the suspension of work goes beyond immediate considerations. If an agreement is not reached by Wednesday, many federal agencies will cease operations, leading to the halt of on-chain economic data publication, particularly the September employment report.
In a note published on Monday, analysts at Bank of America warned: "If the suspension of work continues after the Fed meeting, the Fed will rely on closed data when making policy decisions." At this stage, markets still expect a 90% probability of a rate cut in October and a 65% probability of a second cut in December. However, Bank of America softens this optimism: "This may reduce the likelihood of a cut in October, but only slightly."
The prospect of a prolonged shutdown raises serious social concerns. The same analysts note that each week of shutdown will cost about 0.1 percentage points of GDP, which will undoubtedly have limited consequences but is likely to worsen if "the government takes the opportunity and conducts permanent layoffs," which will negatively impact employment and consumer confidence.
In this context, the next hours will be crucial. Although markets appear to be calm, a combination of possible statistical glitches, the Fed's lack of reliable benchmarks, and a tense political situation could quickly change the balance of power.
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