Markets Weekly Outlook – Navigating the US Shutdown & Global Trends as Equity Markets Continue to Soar

Next week is a quiet week from a data perspective and may be welcomed by market participants.

Obviously the US shutdown is not ideal, but after a busy few weeks of data releases and with earnings season around the corner, market participants may welcome some calm before a potential storm in Q4.

Let us take a look at what may move markets from a data perspective next week.

Asia Pacific Markets

Since Chinese markets are currently closed for the long Golden Week holidays (they won’t reopen until next Thursday), the usual economic reports on inflation and trade will be delayed by a week.

Therefore, the main focus for now will be on reports detailing how much people traveled and spent money during the holiday period. It is also possible that the data on China’s total new loans and credit (aggregate financing) could be released later in the week.

It is a quiet week in Japan with a speech by Governor Ueda the main highlight after the elections this weekend. For more information on the Japanese elections and the Yen, please read USD/JPY Price Outlook: Key Levels, BoJ, and Political Risks.

Attention will turn to the Reserve Bank of New Zealand rate decision on Wednesday. Markets are expecting the Reserve Bank of New Zealand (RBNZ) will lower its interest rate by 0.25% on October 8th, which is what most experts and market pricing currently expect.

US Government Shut Down, Euro Area & UK Data

The main issue next week is the government shutdown in the U.S. Depending on how long it lasts, market participants might not receive many official economic reports. Even if an agreement is reached soon, it will take time to get workers back and release schedules back on track. Reports that could be delayed next week include the trade balance, weekly jobless claims, and inventory numbers.

Despite this, the Federal Reserve (Fed) will still release the minutes from its September meeting (on Wednesday), where they cut rates by 25 basis points. We will also get the August consumer credit data and the initial October consumer sentiment index from the University of Michigan.

Consumer spending is currently stable, but confidence has already fallen sharply this year due to a weaker job market and worries about how tariffs are driving up prices. With millions of federal workers facing missed paychecks or permanent layoffs due to the shutdown, it is unlikely that consumer confidence will improve.

A quiet week for the Euro Area and the UK as well from a data perspective. The EU will release retail sales before we get a speech by ECB President Christine Lagarde.

In the UK the main highlight of the week comes from a speech by Bank of England (BoE) Governor Bailey.