The global financial markets are currently experiencing significant volatility during the European trading session. The partial shutdown of the United States government has emerged as a major catalyst, especially as the release of crucial Non-Farm Payroll (NFP) data risks being delayed. The absence of this typically market-moving data has increased uncertainty, compelling investors to adopt a cautious stance, particularly regarding the US Dollar and risky assets.
The situation is further complicated as market sentiment is divided between concerns over a potential slowdown in the US economy and hopes for the Federal Reserve’s easing monetary policy. Despite gold prices nearly touching a record high of $3,900, they have seen a decline, while the rally in Wall Street is suppressing demand for safe-haven assets. This situation highlights the sensitivity of the market to the ongoing tug-of-war between fiscal and monetary policies.
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Here are the latest figures from Trading Central:
- US Non-farm payroll data at 19:30 WIB: forecast 50K vs previous 22K
- US ISM services PMI data at 21:00 WIB: forecast 51 vs previous 52
GOLD
The price of gold experienced a dip at the beginning of the session but has turned bullish during the European trading hours, reaching a daily high of $3,865.62. A positive sentiment prevails, driven by uncertainty stemming from the US government shutdown, the dovish outlook from the Fed, and geopolitical risks. As the evening progresses, gold still has the potential to strengthen further, supported by these three catalysts.
OIL
Oil prices have staged a rebound from four-month lows, although this recovery is still limited and largely corrective in nature. Overall, the trend continues to be dominated by selling pressure. The forecast for supply is expected to rise sharply, compounded by EIA reports indicating an increase in US oil reserves, signaling weak demand. This factor may reignite selling action in the oil market tonight.
EURUSD
The EURUSD pair is showing positive movement during the European session, peaking at 1.17446, despite Eurozone PPI inflation data dropping to -0.6%, lower than the anticipated -0.3%. The weakening of the US Dollar has been the main catalyst for the strengthening of this pair. The bullish outlook for EURUSD is expected to continue into the evening, bolstered by positive sentiment towards risky assets.
GBPUSD
After facing some pressure, the GBPUSD pair has rebounded from its recent lows, recording a high of 1.34667 during the European session. The lack of NFP data due to the US government shutdown, the Fed’s dovish outlook, and investor interest in risky assets are anticipated to continue supporting this pair during tonight’s trading session.
USDJPY
The USDJPY pair remains highly volatile and is likely to continue this behavior until the US session. The decrease in safe haven demand, domestic political uncertainties in Japan, and market expectations that the Bank of Japan (BoJ) will pursue a normalization policy with interest rate hikes at the end of this month are the primary drivers. This contrasts sharply with projections that the Fed is expected to lower interest rates twice this year, creating strong movement dynamics for USDJPY.
NASDAQ
The Nasdaq index continues its positive trend during the European session, reaching a new all-time high of 25,193. This increase is supported by gains in the technology sector, particularly with Nvidia shares rising by 0.9%, along with Intel and AMD soaring more than 3%. Optimism surrounding AI-driven trading remains a major engine for this rally, even overshadowing concerns related to the US government shutdown.
