The US government is suspended, and non-agricultural data are absent. Will Powell calm down the internal feathers and doves disputes within the Federal Reserve?

This week, the dollar fell on Friday as uncertainty over the U.S. government shutdown casts shadows the economic outlook and delays the release of key data that are crucial to judging the direction of the economy, such as non-farm employment. The US non-farm employment report for September was originally scheduled to be released on Friday, but it was not released due to the government's shutdown.

From the data point of view, this seemingly busy week has not been fulfilled. After the U.S. Congress failed to reach an agreement on funding, the market's eagerly anticipated non-farm employment report did not arrive as expected.

Some people turned to ADP employment estimates as the official government employment report was postponed, which only measures employment in the private sector. The sometimes unreliable report xm217.compared to official data has performed quite negatively this week, showing that the U.S. private sector lost 32,000 jobs in September.

As for the moment, the market continues to fully price the Fed will cut interest rates at its October meeting, and the probability of interest rate cuts in December is also priced at around 90%.

The current government shutdown and the resulting lack of new economic data may not change this long-standing debate. As long as the door shutdown does not last too long, the affected government staff will receive all the wages arrears, which means that the permanent damage to the economy should be minimal. The only uncertainty is whether the threat of mass layoffs will actually happen.

In terms of market conditions, the US dollar index rebounded slightly after falling continuously this week, recording its first decline in three weeks; gold hit new highs this week, but the intraday volatility was extremely large, and there were many "long and short double kills""Taiwan, spot silver rose for the eighth consecutive week, once hitting a new high since 2011. In the third quarter, spot gold and silver rose by 16.8% and 29.23% respectively.

In terms of non-US currencies, due to the weak performance of the US dollar, the euro, the pound, the Australian dollar and the Japanese yen all recorded an overall increase against the US dollar. Crude oil is one of the most weak varieties this week; overall, oil prices fell for four consecutive trading days, with a significant cumulative decline, making it the most significant short market among xm217.commodities this week.

Gold hit new highs this week, but the intraday fluctuations were extremely large, and there were many abnormal trends of "high-level plunge and then pulling up again", indicating that funds are playing a fast game between safe-haven and profit-taking settlement. Spot silver scored for the eighth consecutive week, breaking through $48/oz during the session , hitting a new high since 2011. In the third quarter, spot gold and silver rose 16.8% and 29.23% respectively. In the non-US currencies, the euro, pound, Australian dollar, and Japanese yen all recorded an overall increase against the US dollar due to weak performance.

Foreign exchange market:The US dollar index rebounded slightly after a continuous decline this week, and the overall expected to close for the first time in three weeks. At the beginning of the week, the US index fell for three consecutive days due to the risk of the US government shutdown and employment data being less than expected. It rebounded on Thursday, and returned to the 98 mark intraday. Investors' uncertainty about the length of the US government shutdown and policy path suppressed the US dollar, but the rebound after a short-term oversold limits the decline. This week, the US index closed at 97.72.

Gold Market:The gold price broke through the $3,800 mark in one fell swoop on Monday and continued to rise. It rushed to $3,870 on Tuesday. After a rapid decline, it performed a V-shaped reversal and closed back to the high. Gold broke through $3,890 twice on Wednesday and Thursday, setting a record high again, but the market also fell at a high level, temporarily missing the 3,900 integer mark. Non-agricultural absent on Friday, spot gold closed at $3,886.38/ounce.

Crude Oil Market: Crude Oil is one of the most weak products this week. Overall, oil prices fell for four consecutive trading days, with a significant cumulative decline, making it the most significant short market among xm217.commodities this week. Rumors of OPEC+ production increase on Monday suppressed the market, and oil prices fell by more than 3%; on Tuesday, it was supplied. Remaining concerns continue to decline; although there was a partial rebound on Wednesday, it failed to reverse its weakness; it fell to a five-month low again on Thursday.

Review of the weekly news

1. U.S. government shutdown: 750,000 employees were hit, and economic losses may reach billions

From 000 on October 1, local time, the U.S. government was shut down due to the failure of Congress to pass the temporary appropriations bill, the 15th time since 1981.

The Senate's voting was postponed to Friday due to Yom Kippur holiday, which means the government shutdown lasts for at least three days. Senate Majority Leader John Thun said that if the vote fails on Friday, the possibility of a vote on the weekend is low, but it is not ruled out to meet with minority leader Schumer to seek a breakthrough.

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The shutdown directly affected about 750,000 federal employees. In addition to necessary positions, a large number of people were forced to take leave or work without pay. National parks are closed, case trials are delayed, some public services are stagnant, and the release of economic data is also forced to be postponed. U.S. President Trump met with Budget Office Director Wat to discuss cuts and permanent cuts, and also mentioned the possible layoffs of federal employees. The White House press secretary said the layoffs could reach thousands of people, which is extremely rare in the government shutdown.

The deadlock at the Congress level remains. Thun called on Democrats to support the House of Representatives’ continued resolution to restore government operations, while Democrats demanded an extension of the health care tax credit and restrict the president’s power to revoke congressional funds. The differences have repeatedly blocked the appropriations bill in the Senate. House Minority Leader Jeffries criticized Republicans for cutting taxes for the rich but refused to xm217.compromise on health care issues, believing that public sentiment will eventually force Trump and the Republicans to return to the negotiating table.

Hidden concerns at the economic level are intensifying. Research shows that a week of shutdown may cost the US economy about $7 billion, lowering GDP growth by 0.1 percentage point, and the longer the shutdown, the deeper the impact. US Treasury Secretary Bescent warned the next day that the shutdown will not only damage economic growth, but also impact workers. He criticized the use of closing down as a game method "undesirable", and also criticized the Democratic leaders of the Senate and House of Representatives for being "weak, incompetent, chaotic and disorderly."

In addition, Becente revealed that the selection of successor candidates for the Federal Reserve Chairman is progressing. He has interviewed about 11 potential candidates, the first round of interviews is xm217.completed, and the second round will begin next week. Finally, 3 to 5 people were selected to submit to Trump's decision to replace Powell, whose term expires in May 2026.

2. The US non-farm report in September was not released as planned, the first time in 12 years

The U.S. government shutdown has stagnated the release of key economic data, which coincides with a sensitive period of the US labor market. The unemployment benefit claims data originally scheduled to be released on Thursday and Friday and the September non-farm employment report have been postponed, and the Labor Department's monthly CPI inflation data may also be delayed in the future. The U.S. Labor Secretary said that September employment data will be released immediately after the government reopens.

This "information vacuum" makes the market and the Federal Reserve rely solely on alternative indicators. The "small non-farm" ADP monthly private sector employment report released on Wednesday has attracted much attention. Data shows that the number of employed people unexpectedly decreased by 32,000, and the previous value was revised to a decrease of 3,000, while the market had previously expected an increase of 51,000.

The decline was partly due to the coarse-grained data calculation method used by ADP in its annual benchmark adjustment, which alone led to a 43,000 reduction in employment in September. The ADP explained that this was due to the lack of original data on the Quarterly Employment and Payroll Census and the revisions exceeded the conventional level.

The market responded quickly to the negative results of ADP data, and traders reassessed the interest rate outlook, and expectations for the Fed's two interest rate cuts before the end of the year increased.

After the government shutdown, Democratic Senator Elizabeth Warren called for not postponing the release of key data, emphasizing that employment data should beThe importance of Fed decision-making. Former Bureau of Labor Statistics Director William Beach said non-farm data have been collected and processed in September, and if the Bureau of Labor Statistics resumes operations, it may still be released as planned on Friday.

However, according to the Ministry of Labor’s emergency plan, major economic data, including non-agricultural, will not be released during the shutdown period, and the Economic Analysis Bureau under the Ministry of xm217.commerce has also suspended operations, and data such as import and export, GDP and inflation may be postponed. The government shutdown has put the market and investors in a data vacuum at critical moments, and has also increased the difficulty of making decisions before the Federal Reserve's policy meeting at the end of October.

In addition, the White House withdrew its nomination for Anthony to be the director of the U.S. Bureau of Labor Statistics. Previously, Trump fired then-deputy director Erica McKentavor and nominated Anthony to take over because he was dissatisfied with the employment data released by the Labor Department, but eventually withdrew his nomination due to controversy.

3. The Federal Reserve under the data vacuum: Differences in the path of interest rate cuts have intensified

The shutdown of the US government has led to delayed release of key economic data, and the Federal Reserve's decision-making is in trouble. Losing core data support such as employment and inflation, officials can only rely on limited alternative indicators to determine whether the labor market is so weak that it needs further interest rate cuts. The lack of inflation data has intensified differences and increased market volatility risks.

The Fed's internal stance is clearly differentiated. Williams, chairman of the New York Fed and regarded as the "three-in-command", said signs of weak labor market prompted him to support rate cuts at his latest meeting, with the Federal Reserve lowering the federal funds rate target range to 4%-4.25%, and plans to cut interest rates twice before the end of the year. He stressed that the interest rate cut is to boost the job market and stabilize inflation, with the actual neutral interest rate being around 0.75%.

Vice Chairman Jefferson stressed that without Fed policy support, the job market may face pressure. Boston Fed Chairman Collins said that if data support in the future, a slight rate cut may be cut this year.

Some officials are more cautious. St. Louis Fed Chairman Mousalem said he was open to further interest rate cuts in the future, but reminded the inflation rate to remain higher than the target of 2%, and excessive easing may bring risks. Cleveland Fed Chairman Hamake stressed that the Fed faces a difficult balance between fighting inflation and protecting employment, believing that the restrictive policy stance should be maintained at present, and inflation may not fall back to its target level until the end of 2027 or early 2028. She is particularly concerned about the continued price pressure in the service industry.

Chicago Fed Chairman Goulsby pointed out that the labor market is still stable and does not want to cut interest rates too early based on temporary judgments on inflation. Dallas Fed Chairman Logan believes that the unemployment rate may rise slightly, but the overall policy is only slightly tightened, which is the right state. Therefore, it is necessary to remain highly cautious about interest rate cuts to avoid being forced to reverse the policy in the future.

In addition, in the highly-watched case of the removal of the director Cook, the U.S. Supreme Court allowed Cook to remain in office for a temporary period until an oral debate was held in January 2026 on whether President Trump had legal reasons to fire him. This move is believed to temporarily prevent Trump's intervention in the Fed's independent decision.

4. From movies to wood, Trump's new round of tariff xm217.combinations has arrived

This Monday, Trump announced that he would impose 100% tariffs on all foreign-made movies. He posted on the "Real Social" platform that the US film industry has gradually lost its profits in international xm217.competition, criticizing other countries for stealing American production opportunities "like snatching candies from babies."

It is not clear what legal authority this policy will be implemented, the White House did not respond to relevant requests for xm217.comment, and major film and television xm217.companies such as Warner Bros. Exploration, xm217.comcast, Paramount Skydance and Netflix also remained silent.

On Tuesday, Trump signed an announcement to impose tariffs on imported wood products. Among them, the tariff on cork wood is 10%, and the tariff on cabinets, dressing tables and soft-up wood products is as high as 25%. Some measures will be implemented from October 14, and others will be postponed to January 1 next year. The move stems from an investigation initiated by the Ministry of xm217.commerce in March, which Trump said will strengthen supply chains, create jobs and increase domestic production capacity.

But American residential builders warn that new tariffs may hit new home investment and decoration demand, offsetting the stimulus effect of home purchases brought about by interest rate cuts. Canada, the largest supplier of timber in the United States, will bear the brunt of its supply to the United States, accounting for about one-fifth of the market and has long faced an anti-subsidy tariff of 35.2%. Although Trump claims that the United States does not need to rely on Canadian timber, realistic data shows that Canada is still an indispensable supplier.

When it xm217.comes to drug tariffs, the White House temporarily chooses to back off. Trump has previously threatened to impose triple-digit tariffs on drug imports, but the latest news shows that the plan has been suspended and the government is trying to negotiate prices directly with large pharmaceutical xm217.companies to avoid raising taxes on branded drugs. The agreement with Pfizer announced Tuesday was considered a sample of negotiations. xm217.commerce Secretary Lutnik said at the White House that the administration will prioritize negotiations with pharmaceutical xm217.companies because it is in the interests of the American people.

At the same time, the EU is also adjusting its trade policy. The European xm217.commission plans to sharply tighten steel import rules, cut quotas by nearly half, and raise tariffs on the excess quota from 25% to 50%, and the new regulations are expected to be announced on October 7.

This mechanism echoes the long-term requirements of steel xm217.companies, believing that the current quota is too high and demand is declining. The OECD expects global steel overcapacity to reach 721 million tons by 2027. The EU's new restrictions not only respond to domestic industry calls, but also echo the US tariff policy, becoming a bargaining chip for negotiations between the two sides under the framework of the "Metal Union".

5. Trump and Netanyahu reached a 20-point ceasefire plan for Gaza, and Hamas partially accepted

Trump and Israeli Prime Minister Netanyahu announced a 20-point ceasefire plan aimed at ending the Gaza war.

The plan stipulates that if Israel and Hamas accept the proposal, the conflict that lasted for nearly two years will be terminated immediately, and all hostages and bodies of victims will be returned within 72 hours. Israel will release nearly 2,000 prisoners and will make it clear that it will not occupy or annex Gaza. In addition,The plan also promises to restore assistance to Gaza and convene a "group of experts" to rebuild the Gaza region through economic development.

The plan requires Hamas to agree not to participate directly or indirectly in Gaza governance, and instead transfer control to a technocratic, depoliticized Palestinian xm217.committee responsible for the day-to-day public service operations. The xm217.committee will be supervised by the Peace xm217.commission, with its chairman being Trump, and world leaders such as former British Prime Minister Tony Blair will also be involved. If the agreement is implemented, the future may "finally meet the conditions for establishing a Palestinian State."

On the evening of October 3 local time, Hamas issued a statement expressing his willingness to accept some of the contents of the "20-point Plan" proposed by the United States and is ready to negotiate other contents. Hamas said that in order to achieve a ceasefire in the Gaza Strip and Israel's full withdrawal from the Gaza Strip, it agreed to release all Israeli hostages and hand over the bodies of the victims, but only if the necessary conditions for the exchange are met.

Hamas also expressed his willingness to transfer management of the Gaza Strip to an independent Palestinian institution (technical bureaucracy). In addition, other issues concerning the future of the Gaza Strip and the inherent rights of the Palestinian people in the Trump proposal will be discussed within the Palestinian national framework, and Hamas will also participate and make responsible contributions to this.

Hamas stressed that the release of hostages requires the exchange of conditions and that there will be no disarming until Israel ends its occupation.

6. The value of US gold reserves exceeded US$1 trillion, with a book value of only US$11 billion.

The gold price rose sharply, causing the US Treasury Department's gold reserves to exceed US$1 trillion for the first time. However, according to the official deduction standards set by the U.S. Congress in 1973, gold held by the U.S. government is still included in the balance sheet at a price of $42.22 per ounce, meaning its book value is only slightly higher than $11 billion.

The US government holds the world's largest gold reserves, with a total volume of 8,133 tons, which is 2 to 4 times the sum of the reserves of Germany, Italy and France. Since the beginning of this year, international gold prices have hit new highs due to factors such as trade wars, geopolitical conflicts and the Federal Reserve's interest rate cuts, resulting in the gap between the value of gold officially held by the United States and the book value to nearly $990 billion.

The surge in the value of gold reserves has also rekindled the conspiracy theory that has been silent for months, questioning how much gold the United States has.

The total amount of gold reserves in the United States is about 261.5 million ounces, most of which are stored in deep vaults in Fort Knox, Kentucky. Although Finance Minister Bescent had mentioned the possibility of revaluing the gold reserves, he eventually denied the plan, saying it was not seriously considered. Nevertheless, revaluation of gold reserves will have a profound impact on the financial system, increasing market liquidity and extending the Fed's balance sheet reduction process.

710 billion US dollars! Buffett fell in love with Occupy Oil's "money tree"

According to the Wall Street Journal, Buffett's flagBerkshire Hathaway is planning to acquire OxyChem, a petrochemical subsidiary of OxyPhone for about $10 billion. The deal may be concluded within a few days, which will become Berkshire's largest acquisition since 2022, and also means that Berkshire returns to the petrochemical field after 14 years.

Currently, Berkshire is the largest shareholder of Occupy Oil, with a shareholding ratio of about 28%, and a market value of nearly US$13 billion. In 2024, Oxi Chemical contributed 18% of Oxide's total sales, accounting for $4.92 billion of total revenue of $26.73 billion. Occupy Oil's core is still the oil and gas business, with revenue of approximately US$22 billion last year. Analysts expect the xm217.company's total sales this year to be US$26.74 billion, of which the petrochemical sector is approximately US$4.9 billion.

The deal is significantly attractive for Occupyria. TPH&Co analysts pointed out that the $10 billion pricing would "surprise the market" because investors originally expected the xm217.company to continue to retain the relevant assets. If the transaction is implemented, it will help reduce its leverage ratio and is priced above the book value of assets of about $8.3 billion.

In addition, the asset will not bring considerable free cash flow until at least 2025. Occupy Oil has lowered its pre-tax profit forecast to between $800 million and $900 million, but spending remains high. Since the beginning of this year, the xm217.company's stock price has fallen by 4.4%, mainly dragged down by the decline in oil prices and concerns about debt burden, while the S&P 500 rose about 14% during the same period.

The above content is all about "[XM Foreign Exchange Market Analysis]: The US government is suspended, non-agricultural data are absent. Will Powell calm the internal dispute between the eagles and pigeons of the Federal Reserve?", which was carefully xm217.compiled and edited by the XM Foreign Exchange editor. I hope it will be helpful to your transactions! Thanks for the support!

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