Global Markets Remain Stable Following US Government Shutdown Resolution

Post by : Bianca Suleiman

On Thursday, international markets observed a moment of stillness as the U.S. Congress reached an agreement to terminate the longest government shutdown in history. This development has prompted a blend of caution and optimism among investors regarding the anticipated return of economic data.

In Asia, Japan’s Nikkei index saw a rise of 0.5%, while the broader Topix index experienced an increase of nearly 1%, reaching an all-time high. Investors appeared to shift resources from soaring AI stocks to sectors presenting steadier growth. Meanwhile, gold prices soared past $4,200 an ounce, and U.S. Treasury yields remained stable with the 10-year yield at 4.067%.

The cessation of the shutdown is expected to unlock delayed economic indicators next week, providing enhanced insight for the Federal Reserve regarding future interest rate movements. Analysts suggest that lower rates typically drive investment into gold and precious metals, leading to increased interest in Australian lithium and gold mining stocks. However, the broader Australian market experienced a decline of 1% as other sectors faced difficulties.

Hong Kong’s Hang Seng index eased slightly from a one-month high, while the Shanghai Composite saw a marginal increase of 0.1%. Over on Wall Street, the Dow Jones reached an unprecedented peak, albeit the Nasdaq saw a retreat. In Europe, the mining-centric FTSE 100 closed at a record high, boosted by the banking sector, which lifted the STOXX 600 index to its highest point ever, along with Italy’s FTSE MIB hitting a peak not seen in nearly 25 years.

The Japanese yen continued its decline, experiencing record lows against the euro and approaching a nine-month low against the U.S. dollar, after the country’s newly appointed premier advised prudence regarding further interest rate increases. Conversely, the Australian dollar appreciated slightly following strong employment figures for October, which tempered expectations for impending interest rate cuts.

In the oil markets, Brent crude dipped to $62.48 per barrel, following OPEC’s forecast of a minor supply surplus anticipated for 2026.

As investors globally navigate between the positive outlook from U.S. policy changes and awareness of economic trends, markets are likely to remain responsive to upcoming economic reports and central bank actions.