U.S. Government Shutdown Averted, Focus remains on the NFP data, Central bank meetings and speeches.

US stock futures jumped on Monday after the US legislators were able to come to a temporary agreement that would keep the government open for 45 more days, an extended period that lawmakers can use to finalize funding legislation. Attention turns to the NFP date, PMI numbers, Central bank meetings and speech from Powell and Lagarde

USD

• The yield on the US 10-year Treasury note climbed to 4.61% to kick off the October month, holding close to sixteen-year highs, after the US government successfully averted a shutdown and traders refocus on the Fed's next steps
• A bill ensuring funding until November 17th received support and was promptly signed into law by President Biden just minutes before the deadline, providing some relief to investors
• At the same time, the outlook for sustained high interest rates persists, with traders awaiting a batch of appearances from several Fed officials this week including from Fed Chair Powell for further clues on the central bank's next steps
• On the data front, the payrolls report due Friday will also be keenly watched. five-year peers climbed by a similar amount to 4.64%. Meanwhile, yields on short-term bonds also moved higher, with the 2-year one approaching 5.1% and the five-year one surpassing 4.6%

EUR

• European market traded slightly higher on the first trading session of October, as investors eyed the final manufacturing PMI data from the EU. The preliminary report last month painted a mixed picture of the regions economic health. Traders will also continue to assess the global economic and inflationary outlook amid the prospect that interest rates will remain elevated for a longer period
• Apart from this, expectations that additionalnbsp;ECBnbsp;rate hikes may be off the table for now act as a headwind for the EUR/USD pair
• The EUR/USD pair struggles to gain any meaningful traction on the first day of a new week and oscillates in a narrow trading band, just above mid-1.0500s

GBP

• On the GBP’s front,?BoE?policymakers stated that the central bank could raise or halt interest rates if necessary after the BoE decided to halt its rate-hiking cycle earlier last month.
• However, the market expects BoE to maintain its?monetary policy?in the next meeting, which exerts pressure on the British Pound (GBP). In the absence of economic data released from the UK docket this week, the GBP/USD pair remains at the mercy of USD price dynamics.

Commodities

WTI crude futures rose above $91 per barrel on Monday after falling for two straight sessions, as risk sentiment improved after US legislators were able to strike a last minute deal to avoid a government shutdown. Investors were also focused on a tight global supply outlook ahead of an OPEC+ meeting on Wednesday.

Gold weakened below $1,850 an ounce on Monday, sinking to its lowest levels in seven months amid pressure from a strong dollar and elevated Treasury yields.

Economic Calendar: The Week Ahead

Monday, September 11

• GBP – Housing Prices.
• US ISM Manufacturing PMI.
• FED Powell speech

Tuesday, September 12

• AUD – Interest rate decision
• US Jolts job opening

Wednesday, September 13

• NZD – RBNZ Interest rate decision.
• EUR - HCOB Composite PMI.
• EUR -? Retail Sales
• US ADP employment change
• US ISM services PMI
• ECB president Lagarde’s speech

Thursday, September 14

• US initial jobless claims.

Friday, September 15

• EU leaders summit.
• US nonfarm payrolls

That's all for this week. We'll be back next week with more news and analysis on the global economy. In the meantime, please let us know if you have any questions in the comments.

The weekly market update is published every Monday.

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