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[HFM.]

Date: 3rd October 2025.

US Government Shutdown: Market Fallout, Dollar Outlook, and Gold’s Rally.

Investors Brace for Economic Fallout​

The United States government has officially entered its first shutdown in nearly seven years after lawmakers failed to agree on a funding bill. The development has unsettled global investors, with US equity futures slipping and the Bloomberg Dollar Spot Index dropping 0.1% after the midnight deadline passed.

Federal agencies have been ordered to suspend nonessential services, putting hundreds of thousands of employees on hold and creating uncertainty across vital public programs. Unlike past shutdowns that ended quickly, this standoff looks more severe and could inflict lasting damage on the US economy.

Labour Market and Economic Data Risks​

The most immediate challenge is the suspension of government data releases. Reports on jobless claims, factory orders, and September payrolls will not be published, depriving markets of key signals to assess economic growth and the Federal Reserve’s interest rate path.

“This shutdown could prove more disruptive than usual because of the heightened stakes leading into it,” said Steve Sosnick, chief strategist at Interactive Brokers.

Market Reactions So Far​

• Nasdaq 100 futures fell 1% and S&P 500 contracts dropped 0.8%.
• The 10-year Treasury yield rose one basis point to 4.16%.
• The Cboe Volatility Index (VIX) jumped to 17.28, signalling higher risk aversion.

With stock valuations already stretched after a long bull run, analysts warn that any sharp downturn could trigger forced selling, amplifying losses.

Safe-Haven Demand: Gold, Treasuries, and Currencies​

If the shutdown drags on, investors may seek refuge in defensive assets:

• Gold prices have surged to record highs near $4,000, supported by dollar weakness.
• The Japanese yen and the euro could benefit further if the dollar continues to retreat.
• Long-dated Treasuries may attract buyers on expectations of weaker growth.

“Given high yields, US Treasuries remain attractive, and we advise clients sensitive to shutdown risk to increase exposure,” said Monica Guerra of Morgan Stanley Wealth Management.

Sector-by-Sector Impact​

Defence: Defence giants such as RTX, L3Harris Technologies, and AeroVironment have benefited from strong federal spending. While analysts expect little direct impact, investor sentiment could cool. General Dynamics was recently upgraded to a “buy” on the view that any pullback may present an entry opportunity.

Government Services & Airlines

• Consulting firms like Booz Allen Hamilton, Leidos, and CACI International often see revenue delays during shutdowns.
• Airlines, which rely on government travel for up to 2% of annual revenue, could be hit harder. Reduced leisure travel by unpaid federal workers may further weaken the industry.

Cyclical Sectors: Industrials and financials are especially vulnerable if growth slows and unemployment rises. Caterpillar, Deere, and major banks like JPMorgan Chase may face volatility, while consumer-focused firms such as Affirm Holdings could see sharper swings.

Bloomberg Economics projects that 640,000 federal workers could be furloughed, pushing unemployment to 4.7%. Permanent job cuts, as threatened, may keep joblessness elevated even after operations resume.

Outlook: Volatility Ahead​

Historically, shutdowns have had limited long-term impact on Wall Street. On average, the S&P 500 has barely moved during the last 20 shutdowns. However, near-term volatility is expected, particularly if data releases are delayed.

Private reports, such as ISM manufacturing and services surveys, will likely gain importance for traders navigating uncertainty.

Always trade with strict risk management. Your capital is the single most important aspect of your trading business.

Please note that times displayed based on local time zone and are from time of writing this report.

Click HERE to access the full HFM Economic calendar.

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Andria Pichidi
HFMarkets

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in Leveraged Products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

 

[HFM.]

Date: 10th October 2025.

Stronger US Dollar Pressures Oil and Gold as Fed Divisions Deepen.

Oil prices significantly fell on Thursday after increasing in value throughout the month so far. The stronger price of the US Dollar is now harming the price of oil, as well as de-escalations in global conflicts. Is the Dollar’s current trend likely to continue, and what would that mean for commodities such as Oil?

US Dollar​

When it comes to the US Dollar, investors continue to price in the FOMC Meeting Minutes for September. The Fed cut its benchmark interest rate by 25 basis points to 4.25%, but policymakers were divided on the path ahead. However, the Meeting Minutes confirm several members of the committee supported further monetary easing, arguing that the risks of a weakening labour market outweigh inflation concerns and noting that recent White House tariff changes are unlikely to fuel price growth.

Meanwhile, New York Fed President John Williams said he would not oppose further rate reductions to support employment, but warned that if inflation remains well above the 2% target and proves difficult to contain, it could inflict serious harm on the US economy. Regardless of this, economists continue to believe the Federal Reserve will cut in October and most likely again in December. Currently, the lower interest rates are the largest risk and downward force for the US Dollar.

The upward price pressure is partially due to the US government shutdown, which is triggering a lower risk appetite. The latest development for the US Dollar is the currency swap between the US and the Central Bank of Argentina. The move is, in a sense, a bailout for the country, which has seen its GDP growth fall to -1.7%.

US Dollar Index Daily Chart


Investors should be cautious of the resistance level at 99.90 on the US Dollar Index. If the index rises above this level, it will be the highest the US Dollar has been since May.

Crude Oil​

Oil prices have risen recently due to the OPEC+ decision to raise output by only 137,000 barrels per day, well below analysts’ expectations of a 274,000–411,000 barrel increase. However, the announcement of a ceasefire between Israel and Hamas, which took effect yesterday, has limited further upside. Under the agreement, hostilities will end, Israel will partially withdraw troops from Gaza, and Hamas will release its hostages.

In addition to this, no further escalations have been made in Eastern Europe by Russia. As a result, the upward pressure in Oil prices has significantly fallen. In addition to this, the more expensive US Dollar also makes Oil and similar commodities less attractive for buyers.

Furthermore, Gold prices fell 2.80% on Thursday, mainly due to high profit-taking and the bullish US Dollar having a negative effect. The US Dollar is pressuring Gold prices due to the well-known inverse correlation between the two.

Key Takeaways:​

1. Oil prices fell as a stronger US Dollar and easing geopolitical tensions reduced upward momentum.
2. Fed minutes show officials divided on future cuts, but further easing remains likely this year.
3. The US Dollar strengthened amid safe-haven demand, government shutdown risks, and a new Argentina currency swap.
4. Gold dropped 2.8% as profit-taking and the Dollar’s rally pressured commodities across markets.

Always trade with strict risk management. Your capital is the single most important aspect of your trading business.

Please note that times displayed based on local time zone and are from time of writing this report.

Click HERE to access the full HFM Economic calendar.

Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding of how markets work. Click HERE to register for FREE!

Click HERE to READ more Market news.

Michalis Efthymiou
HFMarkets

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in Leveraged Products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

 

[HFM.]

Date: 13th October 2025.

Asian Stocks Fall as US–China Tensions Rise; Gold Nears $4,060.

Asian equities fell sharply on Monday after renewed trade frictions between Washington and Beijing disrupted the recent period of calm on Wall Street.

US markets ended last week lower as President Donald Trump threatened to escalate tariffs on Chinese goods in response to Beijing’s restrictions on rare earth exports, materials vital for industries ranging from consumer electronics to aerospace manufacturing.

Despite the turmoil, US futures rebounded, with S&P 500 contracts up 1.4% and Dow Jones Industrial Average futures gaining 1%.

China’s latest trade data showed global exports rising 8.3% in September compared to a year earlier, the fastest pace in six months, as manufacturers shifted focus to non-US markets. However, exports to the United States plunged 27% year-on-year, underscoring the impact of ongoing trade disputes.

In Hong Kong, the Hang Seng Index slumped 2.2% to 25,700.07, while most other key regional markets also recorded losses exceeding 1%. The Shanghai Composite slipped 0.2% to 3,889.50, South Korea’s Kospi fell 0.7% to 3,584.55, and Australia’s S&P/ASX 200 shed 0.8% to 8,882.80. Taiwan’s Taiex declined 1.4%, and India’s Sensex eased 0.4%. Japanese markets remained closed for a public holiday.

On Friday, US indices endured their steepest declines in months: the S&P 500 dropped 2.7% to 6,552.51, the Dow retreated 1.9% to 45,479.60, and the Nasdaq fell 3.6% to 22,204.43, signalling renewed concerns about the trade war’s escalation.

Trump, writing on Truth Social, criticised Beijing and hinted that a planned meeting with Chinese President Xi Jinping might no longer take place, saying ‘there seems to be no reason’ to continue with the discussions.

Losses were widespread across the S&P 500, affecting nearly all sectors, from major technology firms such as Apple and Nvidia to smaller companies struggling with uncertainty over tariffs and global supply chains.

Equities were already vulnerable to a pullback following the S&P 500’s relentless 35% rally from its April low. Analysts have long argued that valuations have become overstretched, with stock prices rising far faster than corporate earnings, particularly in the AI sector, where some see parallels to the dot-com bubble of the early 2000s.

Meanwhile, bond yields fell as investors sought safety. The yield on the 10-year Treasury note dropped to 4.05% from 4.14% on Thursday, following weak US consumer sentiment data from the University of Michigan.

Oil markets also experienced significant swings. USOIL slid 4.2% to $58.90 per barrel on Friday, weighed down by reports of a ceasefire between Israel and Hamas, a development that could ease concerns about potential supply disruptions. UKOIL fell 3.8% to $62.73 but recovered modestly early Monday to trade near $63.58 per barrel. US crude also rebounded to $59.62 per barrel.

Dollar Strengthens; Gold and Silver Rally

Currency markets showed the dollar strengthening against the yen, trading at ¥152.22 versus ¥151.89 late Friday, while the euro edged down to $1.1605.

In precious metals, gold extended its rally, rising nearly 1% to revisit recent highs around $4,060 per ounce. The renewed strength came after a brief dip triggered by profit-taking, as investors flocked back to safe-haven assets amid escalating US–China tensions.

The dispute over rare earth exports underscored the unpredictability of trade policy and highlighted Beijing’s willingness to use strategic resources as leverage. As a result, gold once again emerged as a key beneficiary, attracting fresh demand ahead of the European session.

Silver followed suit, surging more than 2% to $51.54 after breaking above the $50 threshold, signalling continued bullish momentum.

Outlook​

As the trade dispute between the world’s two largest economies intensifies, market volatility is expected to remain elevated. Investors are likely to monitor diplomatic developments closely, while safe-haven assets like gold could continue to benefit from geopolitical tensions and tariff threats.

Always trade with strict risk management. Your capital is the single most important aspect of your trading business.

Please note that times displayed based on local time zone and are from time of writing this report.

Click HERE to access the full HFM Economic calendar.

Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding of how markets work. Click HERE to register for FREE!

Click HERE to READ more Market news.

Andria Pichidi
HFMarkets

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in Leveraged Products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.