Shutdown Risk Weakens Dollar, Markets Reprice

As Congress neared a midnight funding deadline and President Trump and other Republican leaders signaled a partial government shutdown was increasingly likely, markets turned cautious and the dollar weakened. USD/JPY slid toward 148 as safe‑haven demand lifted the yen, Treasuries rallied, gold briefly hit record highs, and U.S. equities slipped. A shutdown that halts Bureau of Labor Statistics releases could delay Friday’s crucial nonfarm payrolls report, creating an information vacuum ahead of the Federal Reserve’s October meeting and prompting markets to price roughly 25 basis points for October with further easing expected later in the year. Traders will instead lean on partial labour signals this week — JOLTS, ADP and employment PMIs — which so far point to cooling hiring and job openings. Strategists say short shutdowns are usually absorbed but a prolonged impasse would heighten downside growth risks, could accelerate a Fed pivot and reshape market leadership, while oil slipped amid OPEC+ supply considerations.