Bitcoin Pulls Back as Government Shutdown Delays Key Data — Market Talk
0720 GMT - Bitcoin pulls back slightly after reaching a seven-week high in the previous session as a U.S. government shutdown persists. The cryptocurrency was propelled higher after U.S. stocks rallied overnight on the back of OpenAI's recent funding round that saw its valuation soar to $500 billion. Expectations for further interest-rate cuts by the Federal Reserve this year in the wake of Wednesday's weak ADP private payrolls data also boosted risk sentiment. However, an ongoing U.S. government shutdown means official data, including Friday's nonfarm payrolls report, will likely be delayed so the market is left with some uncertainty. Bitcoin falls 0.7% to $119,927 after reaching a high of $121,065 Thursday, LSEG data show. ([email protected])0711 GMT - U.S. Treasury yields edge higher after recent declines, amid a continued U.S. government shutdown which will delay Friday's key monthly U.S. jobs data. This leaves focus on other jobs indicators which have been mixed. Revelio Labs data suggested payrolls were up around 60,000 in September while Challenger data showed fewer job cuts. This "boosted optimism on the near-term U.S. outlook," Deutsche Bank analysts say in a note. Still, yields remain close to lows reached in the wake of Wednesday's ADP private payrolls data. These showed an unexpected drop, which boosted rate-cut prospects. The 10-year Treasury yield rises 1 basis point to 4.098% but stays near Thursday's two-week low of 4.083%, Tradeweb data show. ([email protected])0651 GMT - The dollar trades steady as an ongoing U.S. government shutdown means the key nonfarm payrolls report is unlikely to be released Friday as scheduled. The shutdown started Wednesday after lawmakers failed to agree a funding deal. With official data being delayed, private data are attracting more attention. A report from the Challenger, Gray & Christmas on Thursday showed employers announced fewer job cuts in September but hiring plans so far this year were the lowest since 2009. The ISM services report at 1400 GMT is in focus Friday. The DXY dollar index trades flat at 97.855.([email protected])0552 GMT - Nomura's base case remains for a 25-basis-point cut in rates by the Reserve Bank of New Zealand next week, with a follow-up in November. That would take the cash rate into accommodative territory and help set the stage for a recovery, the bank adds in a note to clients. A number of analysts have forecast a 50-basis-point rate cut following the surprise 0.9% decline in 2Q GDP on quarter. Markets are implying a 30% probability of a 50bp cut. Nomura adds that it is better to characterize the economy as broadly flat in 1H, rather than suggesting that it might be falling off a cliff. ([email protected]; @JamesGlynnWSJ)0535 GMT - Switzerland's central bank looks unlikely to cut interest rates despite no signs of a pickup in inflation, Pantheon Macroeconomics' Claus Vistesen and Melanie Debono write. Consumer prices rose at an annual rate of just 0.2%, unchanged from prior months, figures this week showed. The rate could well slip below zero into the realm of deflation, according to Pantheon's estimates. Still, the Swiss National Bank looks prepared to accept a period of inflation below its target range, and expects inflation to begin to rise again beyond then, Vistesen and Debono say. That makes unlikely any fresh cuts to interest rates, which currently stand at 0%, they say. "We don't expect further easing," the economists say.([email protected]; @joshualeokirby)0525 GMT - Despite the big contraction in New Zealand's 2Q GDP, Citi maintains its long-held view that the Reserve Bank of New Zealand will cut interest rates by 25 basis points next week and follow it up by three further 25-basis-point cuts for a terminal OCR of 2.0%. However, the risks are clearly tilted to the dovish side and there is a risk of a 50-basis-point cut, Citi says in a note to clients. Ultimately, there is some value in waiting for coming job market and inflation reports before committing to larger quantum cuts, it adds. ([email protected]; X @JamesGlynnWSJ)0439 GMT - China's consumption sector is likely to see some improvement in the near term, according to HSBC economists in a research note. The eight-day national holiday, stimulus measures for services and trade-ins are expected to boost spending, they say. The government forecasts another record in passenger trips taken to 2.36 billion trips for the week-long national holiday, up 3.2% on year, HSBC points out. Consumer goods trade-in subsidies announced by the end of September could help provide a boost just in time for the holiday, they add.([email protected])0351 GMT - China's share of the global economy is likely to keep declining after the end of its era of surging growth, Capital Economics economist Mark Williams says in a research note. China's economy is on course to see its share of global output shrink for a fourth consecutive year in 2025 at market exchange rates, pressured by a weak currency and sustained inflation, the economist says. China's share of the global economy has inched up to 17% from 15% since 2015, after tripling from 5% in the previous decade, Williams notes. The pullback implies China's capacity to project economic power in the future is limited. Weaker productivity growth and demographic decline will likely slow China's real growth rate to 2% by 2030, the economist estimates. ([email protected])0341 GMT - China's export growth likely slowed in September, according to Citi analysts in a research note. Total cargo throughput unexpectedly saw a decline in the last week of September, as Typhoon Ragasa hit, with unfavorable base effects kicking in, the analysts note. Citi now expects 5.5% on-year export growth for the whole month. China's new trade strategy could be emerging, as the ministry of commerce announced measures to manage electric vehicle exports through licenses ahead of Beijing's release of its 15th Five-Year Plan, they note. ([email protected])0317 GMT - The Malaysian ringgit may stay below 4.20 against the U.S. dollar next week, Kenanga economists say in a note. A softer dollar and positive sentiment surrounding Malaysia's 2026 budget, due next Friday, supports this outlook, they say. They also note that a U.S. government shutdown could continue for at least a week, putting additional pressure on the dollar. Historical shutdowns have typically led to a steeper U.S. yield curve and a weaker dollar. However, without major directional drivers apart from FOMC minutes, investors may remain selective instead of broadly selling the greenback, they add. Kenanga expects USD/MYR to face resistance at 4.22 and support at 4.20 in the short term. USD/MYR is 0.2% higher at 4.2130. ([email protected])0304 GMT - The Singapore dollar consolidates against its U.S. counterpart in the Asian session, as traders assess the potential impact of the U.S. government shutdown. President Trump has warned that a prolonged shutdown could lead to federal firings and project cuts--as well as signaling readiness to use the shutdown to push for spending cuts aimed at Democratic priorities, CIMB's research analysts say in a report. "With key economic data releases suspended, Fed policy assessment remains clouded," they say. USD/SGD is little changed at 1.2897, according to FactSet data. ([email protected])0249 GMT - China's decision to halt U.S. soybean purchases is another bargaining chip in trade negotiation, Nomura analysts say in a research note. Soybeans are the single largest export by value that China purchases from the U.S. China not buying U.S. soybeans exerts immense pressure on U.S. farmers as normally more than half of U.S. soybean exports are shipped to China, the analysts say, adding that Beijing's export ban on rare earths played a major role in achieving the U.S.-China trade truce in May. "In the near term, the use of export and import bans could help cap U.S.-China bilateral tariffs," the analysts note. However, the frequent use of such bans could further derail relations between the two in the long term, they add. ([email protected])