Markets navigated a complex landscape on Monday as looming U.S. government shutdown fears weighed on the dollar while precious metals and cryptocurrencies caught strong bids on safe-haven flows and fiscal uncertainty.
Check out the headlines and economic updates you may have missed in the latest trading sessions!
Headlines & Data:
- Japan Leading Indicators Index for July 2025: 106.1 (105.9 forecast; 105.6 previous)
- Bank of Japan board member Asahi Noguchi said on Monday that the need for adjusting policy rate is growing
- U.K. Mortgage Approvals for August 2025: 64.68k (64.5k forecast; 65.35k previous)
- U.K. Net Lending to Individuals for August 2025: 6.0B (6.2B forecast; 6.14B previous)
- U.K. BoE Consumer Credit for August 2025: 1.69B (1.5B forecast; 1.62B previous)
- Euro area Economic Sentiment for September 2025: 95.5 (95.1 forecast; 95.2 previous)
- Euro area Consumer Confidence for September 2025: -14.9 (-14.9 forecast; -15.5 previous)
- Federal Reserve Bank of St. Louis President Musalem said he’s open to further rate cuts, but should move carefully
- Federal Reserve Bank of Cleveland President Beth Hammack argues against rate cuts as inflation could stay above targets for a few years
- New York Fed President Williams thinks inflation risks have dipped while employment risks have risen
- U.S. Pending Home Sales for August 2025: 4.0% m/m (1.7% m/m forecast; -0.4% m/m previous); 3.8% y/y (1.9% y/y forecast; 0.7% y/y previous)
- U.S. Dallas Fed Manufacturing Index for September 2025: -8.7 (-7.0 forecast; -1.8 previous)
- US President Trump and Israeli Prime Minister Netanyahu announced on Monday an agreement to a 20-Point plan to end war in Gaza
Broad Market Price Action:
Government shutdown anxieties dominated Monday’s trading narrative as congressional leaders prepared for a critical White House meeting with President Trump just hours before federal funding would expire. Despite the political uncertainty, risk assets showed surprising resilience while traditional havens diverged in their responses.
The S&P 500 managed to eke out marginal gains as investors appeared to look past immediate shutdown risks, likely signaling they were focused on Fed rate cuts. The index traded in tight ranges throughout the session, with early weakness giving way to a modest recovery during the New York afternoon as pending home sales data surprised significantly to the upside.
Bitcoin emerged as Monday’s standout performer, surging 4.60% to trade above $114,000 as the cryptocurrency likely continued to benefit from its evolving role as an alternative hedge against fiscal uncertainty and potential dollar weakness. The digital asset caught a strong bid during Asian hours and maintained momentum throughout global trading sessions.
Gold extended its run higher, climbing 1.80% to fresh all-time highs around $3,825 per ounce. The precious metal’s relentless advance reflected mounting concerns about U.S. fiscal sustainability, government shutdown risks, and mixed signals from Federal Reserve officials about the future path of monetary policy.
WTI crude oil faced significant selling pressure, plummeting 2.70% to close near $63.10 as reports emerged that OPEC+ may consider additional production increases at their upcoming meeting. The prospect of fresh supply into an already oversupplied market plus growing sentiment of a deal in the works to end the war in Gaza had oil bears out to play and in control today.
The 10-year Treasury yield declined 0.74% as bond buyers emerged amid shutdown concerns and mixed Fed commentary, with the benchmark yield pulling back from recent highs as traders positioned for potential economic disruption from a government closure.
FX Market Behavior: U.S. Dollar vs. Majors:
The U.S. dollar suffered broad-based losses on Monday, weakening against all major currencies. Selling pressure emerged during the Asian session and intensified ahead of European trading hours. Traders appeared to position defensively ahead of a critical congressional meeting scheduled for later in the day to address funding negotiations.
Volatility increased during U.S. trading hours amid conflicting developments. President Trump announced new tariff threats on furniture and films, while simultaneously unveiling an agreement with Israeli Prime Minister Netanyahu on a proposal to end the war in Gaza. Several Federal Reserve officials spoke after the London close, with their comments on gradual policy adjustments potentially providing modest support for the dollar during the final hours of trading.
Against individual currencies, the yen emerged as the day’s strongest performer versus the dollar, likely a reaction to BOJ board member Noguchi’s hawkish comments about the increasing need for policy adjustments, driving USD/JPY 0.63% lower. The remarks reinforced market expectations for potential BOJ tightening, providing fundamental support for the yen beyond haven flows.
The Aussie also had a solid day AUD against the majors as traders awaited Tuesday’s RBA decision, potentially reflecting traders pricing in net positive Australia data in recent weeks, including a strong CPI read last week.
Upcoming Potential Catalysts on the Economic Calendar
- Japan Retail Sales for August 2025 at 11:50 pm GMT
- Japan Industrial Production Prel for August 2025 at 11:50 pm GMT
- Japan BoJ Summary of Opinions at 11:50 pm GMT
- New Zealand ANZ Business Confidence for September 2025 at 12:00 am GMT
- Australia Building Permits Prel for August 2025 at 1:30 am GMT
- China NBS Manufacturing PMI for September 2025 at 1:30 am GMT
- Australia RBA Interest Rate Decision for September 30, 2025 at 4:30 am GMT
- Australia RBA Press Conference at 5:30 am GMT
- Japan Housing Starts for August 2025 at 5:00 am GMT
- Germany Retail Sales for August 2025 at 6:00 am GMT
- U.K. GDP Growth Rate Final for June 30, 2025 at 6:00 am GMT
- Swiss KOF Leading Indicators for September 2025 at 7:00 am GMT
- Germany Unemployment Rate for September 2025 at 7:55 am GMT
- U.S. Fed Jefferson Speech at 10:00 am GMT
- Germany Consumer Prices Growth Rate Prel for September 2025 at 12:00 pm GMT
- U.K. BoE Ramsden Speech at 12:00 pm GMT
- ECB President Lagarde Speech at 12:50 pm GMT
- U.S. S&P/Case-Shiller Home Price for July 2025 at 1:00 pm GMT
- U.S. House Price Index for July 2025 at 1:00 pm GMT
- U.K. BoE L Mann Speech at 1:25 pm GMT
- U.S. Chicago PMI for September 2025 at 1:45 pm GMT
- U.S. JOLTs Job Openings for August 2025 at 2:00 pm GMT
- U.S. CB Consumer Confidence for September 2025 at 2:00 pm GMT
Markets are in for a BUSY day with tons of potential sentiment-changers on tap. The RBA Monetary Policy Statement is right around the corner, and likely to shake up Aussie positions rapidly, so be sure to check out our Event Guide before dipping a toe into those waters.
Traders will also be on the lookout for the U.S. JOLTs Job Openings & Consumer Confidence data updates during the U.S. session. Markets will likely to any jobs surprises and sentiment shifts following last week’s stronger U.S. economic data that already trimmed rate cut expectations.
As always, look out for global trade developments and geopolitical headlines that could influence overall market sentiment. Stay nimble and don’t forget to check out our Forex Correlation Calculator when taking any trades!
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