Markets Weekly Outlook – Traders get impatient for the US shutdown to end

Navigating through the headlines can be difficult in Markets.

Even when Stock indices break new records week after week, negative headlines can lead readers to adopt a more pessimistic view compared to how things really are – this explains, in part, the “Buy the rumours, Sell the news” adage.

However, when Stock indices start to reverse sharply, headlines begin to have a snowball effect.

November trading began at the beginning of this week and brought with it some winter headwinds:

Almost all global stock indices are lower, and cryptocurrencies have taken a huge hit, leaving investors scratching their heads to know where to put their money.

To accompany these flows, tons of speeches and headlines on high AI stock valuation and spendings start to send vibes of a lack of confidence (and this could also be seen in the latest University of Michigan survey)

Most Read: Consumer Pessimism and Job Cuts Increase Uncertainty About Economic Outlook in US

As the week comes to an end, a rough beginning of the month for safe-havens, particularly metals, began to materialize in somewhat of a new rebound – Gold is back above $4,000.

US Treasuries are also following suit, closing the week at their highs.

A more hawkish FedSpeak (following Powell's October meeting tone) throughout the week started to cast doubts on a December meeting cut, further hurting Market optimism.

The US Shutdown was not significantly impact markets throughout the past month, but as more governmental services and sectors are affected, with even flight numbers being reduced, this is changing.

US Vice President JD Vance has even sent out warnings on the consequences of the prolonged shutdown.

All of these catalysts begin to have an impact on sentiment in the broader context.

Magnitude of movements for cryptocurrencies are usually higher, but this weekly asset performance chart shows well how risk assets took a hit this week.

More defensive stock indices like the Dow Jones finishes down 1.50%, the tech-heavy Nasdaq down 3.56%, dragged down further by pessimistic warnings from the Nvidia CEO or OpenAI's CFO.

At the extreme of the risk and volatility spectrum, cryptocurrencies took a big slap in the face.

Bitcoin, the most stable, lost a bit more than 5% in value – just hanging above the $100,000 mark – while Ethereum, Solana and other altcoins lost a minimum of 10% (and much more).

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The week was one of a risk-appetite that reduced drastically.

Nonetheless, some more vodish pricings and hopes for a US government reopening helped equities to catch around the same time that European indices closed.

AUD traders will have to stay sharp with Australian data largely taking the front-scene. Monday will begin with Consumer confidence data but the key really is the Australian Employment data, releasing on Wednesday evening (20:30).

The bar is high for the number, with Australia maintaining a strong look throughout the year but has started to show a few signs of slowing.

For those keeping an eye on China (particularly after the disastrous trade numbers released yesterday), APAC traders will want to monitor the Industrial production and retail sales number to see if the PBoC has more room for stimulus (typically a booster for AUD and NZD).

Kiwi data is also not to be forgotten with their very key RBNZ inflation expectations numbers also releasing Monday night at 20:30 (ET).

As the Bureau of Labor Statistics is still closed until further notice and no private data is on the watch next week, traders will have to be a bit more patient to get an idea of the state of the US Economy.

However, there is still work to do, particularly for those interested in European and UK dynamics.

Starting Tuesday, GBP traders will welcome the UK employment (releasing at 3:00 A.M on Tuesday) which will once again have a big influence on the next "live" Bank of England meeting on December 18th (live meaning that the decision should largely depend on upcoming data).

Major UK data continues on Thursday, same time, with the release of the Monthly and Quarterly GDP data.

The EU will also publish their own Employment and GDP figures on Friday at 6:00 A.M. (ET).

Of course, Euro traders will have to log in for the German CPI released in the Wednesday overnight session.

Except for a miracle, don't hope too much for the release of US Data like CPI and PPi this week (they will hopefully get published at some point towards the end of this month or the next).

Safe Trades and enjoy your weekend!

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