Markets navigated the first US government shutdown in seven years with surprising resilience on Wednesday, as equities posted a fourth consecutive gain despite the political dysfunction in Washington. The shocking negative ADP payrolls print intensified Fed rate cut expectations, sending Treasury yields lower while gold and Bitcoin marched higher.
Check out the headlines and economic updates you may have missed in the latest trading sessions!
Headlines & Data:
- U.S. Government Shutdown begins at 12:01 AM ET as lawmakers fail to reach funding agreement
- Australia AIG Manufacturing Index for September 2025: -13.2 (-22.0 forecast; -20.9 previous)
- Japan Tankan Large Manufacturers Index for Q3 2025: 14.0 (15.0 forecast; 13.0 previous)
- Japan S&P Global Manufacturing PMI Final for September 2025: 48.5 (48.4 forecast; 49.7 previous)
- U.K. Nationwide Housing Prices for September 2025: 0.5% m/m (0.6% m/m forecast); 2.2% y/y (2.1% y/y forecast)
- Swiss procure.ch Manufacturing PMI for September 2025: 46.3 (47.5 forecast; 49.0 previous)
- Euro area HCOB Manufacturing PMI Final for September 2025: 49.8 (49.5 forecast; 50.7 previous)
- Euro area CPI Flash for September 2025: 2.2% y/y (2.2% y/y forecast; 2.0% y/y previous)
- U.S. ADP Employment for September 2025: -32.0k (40.0k forecast; 54.0k previous) – first negative print in years
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U.S. ISM Manufacturing PMI for September 2025: 49.1 (49.0 forecast; 48.7 previous) – seventh straight month below 50
- U.S. ISM Manufacturing Employment: 45.3 (44.0 forecast; 43.8 previous)
- U.S. ISM Manufacturing Prices: 61.9 (63.6 forecast; 63.7 previous)
Broad Market Price Action:
Dollar Index, Gold, S&P 500, Oil, U.S. 10-yr Yield, Bitcoin Overlay Chart by TradingView
Wednesday’s session unfolded against the backdrop of the first U.S. government shutdown since 2018-2019, yet risk assets displayed remarkable composure as weak labor market data reinforced expectations for aggressive Federal Reserve easing.
The S&P 500 rose for a fourth consecutive session as traders shrugged off shutdown concerns, focusing more on the implications of deteriorating employment conditions for monetary policy. Technology shares led the advance, with Nvidia rising in sympathy with CoreWeave’s $14.2 billion AI cloud infrastructure deal with Meta Platforms.
Gold caught more gains once again, with futures surging above $3,900 per ounce as the combination of government dysfunction, shocking employment weakness, and Fed easing expectations likely created a perfect storm for the precious metal. The shutdown fears were particularly supportive as markets worried about delays to key economic data releases, including Friday’s crucial U.S. non-farm payrolls report.
WTI crude oil faced continued pressure, with futures sinking as low as $61.40, likely weighed down by ongoing concerns about OPEC+ potentially approving another oil production increase of at least 137,000 barrels a day at its meeting Sunday. The resumption of crude flows from Iraq’s northern Kurdistan region to Turkey potentially further exacerbated oversupply concerns.
Bitcoin showed big bull moves, climbing above $118,000 for a moment as the cryptocurrency likely continued to benefit from its emerging role as an alternative asset amid the U.S. government shutdown. News of Metaplanet acquiring over 5K bitcoin during the London session may have been a driver in BTC bullishness as well.
The 10-year Treasury yield touched 4.085% before hovering around 4.10%, with bonds rallying sharply following the start of the U.S. government shutdown and the disastrous ADP employment report that showed the first contraction in private payrolls in years.
FX Market Behavior: U.S. Dollar vs. Majors:
Overlay of USD vs. Majors Chart by TradingView
The dollar experienced significant intraday volatility on Wednesday, initially falling after the start of the U.S. government shutdown, then taking an extra dip after the shocking ADP data before staging a partial recovery during the U.S. afternoon session.
The greenback began the Asian session quiet and choppy before moving lower after the government shutdown commenced later in the Asia session. Republicans and Democrats failed to strike an agreement to fund the federal government into the new fiscal year, and the shutdown immediately sparked concerns about data availability. The Bureau of Labor Statistics confirmed it won’t issue any economic reports during the shutdown, likely meaning no September jobs report Friday morning.
This arguably made the pivotal moment of the week turn into the release of ADP Non-farm payroll data today, which showed private employers shed 32,000 jobs in September versus expectations for a 45,000 increase. This marked the first negative reading in years and sent the dollar tumbling to session lows as traders immediately priced in more aggressive Fed easing.
However, the greenback found support soon after, correlating with the ISM Manufacturing PMI. While the headline read was in contraction territory for a seventh month, it did slightly beat expectations. It’s quite possible that the dollar’s partial recovery likely reflected position squaring ahead of potential volatility from the shutdown’s unknown duration.
Against individual currencies, the yen emerged as a notable outperformer, most likely benefiting from safe-haven flows amid the U.S. political dysfunction. The euro held steady despite eurozone inflation accelerating to 2.2% as expected, while commodity currencies were mixed as as traders balanced regional growth concerns vs. U.S. Dollar weakness.
Upcoming Potential Catalysts on the Economic Calendar
- Australia Balance of Trade for August 2025 at 1:30 am GMT
- Australia RBA Financial Stability Review at 1:30 am GMT
- Japan Consumer Confidence for September 2025 at 5:00 am GMT
- Swiss Consumer Price Index Growth Rate for September 2025 at 6:30 am GMT
- Euro area Unemployment Rate for August 2025 at 9:00 am GMT
- U.S. Challenger Job Cuts for September 2025 at 11:30 am GMT
- U.S. Initial Jobless Claims for September 27, 2025 (if released)
- U.S. Factory Orders for August 2025 (if released)
- U.S. Fed Logan Speech at 2:30 pm GMT
Thursday’s calendar is much lighter than yesterday, but does contain a few nuggets worth taking a few minutes to prepare for. Swiss inflation data is on deck and could influence SNB policy expectations, so it’s likely CHF could see short-term moves worthy of attention from intraday traders and scalpers.
Thursday’s would typically feature critical U.S. jobless claims data, but the government shutdown pretty much takes that off the docket, likely making the U.S. Challenger Job Cuts update the one to watch for potential moves during the U.S. session.
Of course, traders will be standing by for any updates on shutdown negotiations. Vice President JD Vance indicated he doesn’t anticipate a long shutdown, though the White House is planning swift dismissals of federal workers if it extends beyond days, adding another layer of uncertainty to an already fraught situation.
Stay frosty out there forex friends and don’t forget to check out our Forex Correlation Calculator when taking any trades!
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