Lights out for US government
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How could a US government shutdown impact non‑farm payroll data and markets?
No breakthrough yet on the prospect of a US government shutdown. It could mean no jobs data this Friday, which could leave everyone guessing as to how the labour market is really travelling. Oil falls on questions over whether OPEC Plus is going to up production again. And it's the RBA today. It's Tuesday, it's the 30th of September 2025. It's the morning call from NAV. Good morning. Well, a slight fall in the US dollar with a big lift in the Aussie dollar up 0.6% to 65.8 US cents. The yen is up by a similar amount this morning. The Nasdaq has climbed 0.4%, but other indices, including those in Europe, they're up, but not by much. We've got big falls in Japanese shares yesterday as well. But a good day for China.
And bond yields are generally down. Three basis points lower for ten-year treasuries. Aussie ten years. Around 4.35% this morning, uh, five basis point four since yesterday, and big falls in oil as well. Brent is down almost three and a half percent, and gold hits another record high. And Nabs Rayatral is here today joining us in Sydney. So um, yeah, shares are not at their peak. Uh, I mean, we had quite a uh retracement in in all indices, including the Nasdaq, so that was up. over one percent earlier. Uh, but it's lost its uh momentum because it looks like it's gonna be game on for that government shutdown in the United States.
Yeah, good morning, Phil. It certainly looks that way. It uh I haven't seen the ins and outs of the sectors. And obviously, you know, you mentioned lower oil prices, which will have weighed on the the energy sector, but it does look as though, you know, markets are bracing themselves for um the likelihood that we will see a shutdown. So a reminder that the deadline for that is what eleven fifty nine Washington time uh this evening, which will be effectively it'll be mid afternoon.
What does the recent drop in oil prices mean for the energy sector and Australian markets?
Wednesday, Australian time, when that actually kicks in, but I've not seen anything to give reason for optimism that a deal is going to be struck. And I was having a quick look yesterday at how markets responded to the last government shutdown, which was in sort of mid-December 2018 and ran through mid-January 2019. And certainly in the first 10 days or so of the shutdown. We did see some pretty sizable moves in markets, particularly a sell-off in the US equity market. The S P five hundred was actually off the best part of ten percent in the ten day of the first ten days of the shutdown. And we saw the likes of two-year Treasury yields going from about two point six percent to I think two point four percent.
Now, you have to look at what else was going on at the time, but uh and probably you know worth Noting that the moves that we saw in the the first half of the shutdown were fully retraced in the second half, although um I was reminded yesterday that the non farm payrolls report for December, which came out in January, was an absolute blockbuster affair now because the um the BLS was open at that time and the data came out and it was very strong. The chances are we aren't going to see the BLS in a position to publish Publish Friday's uh non farm payrolls report if indeed we do get a shutdown. So I just think there's a little bit of markets thinking, what was the playbook last time and creating a a a fair bit of nervousness with um with US bond yields down a little bit and you say the equity market looking a little bit shaky?
But the circumstances are different, obviously, aren't they? And the because the big question is, are we gonna see uh another bad non farm payrolls? And if we just don't know, then we've got nothing to go on in terms of of guidance for where the labour market is actually heading in the United States.
Yes, although to paraphrase your own words from last week, Phil, no news is good news, right? So um you know if there isn't any data around, then uh markets haven't got any reason to to to get pessimistic. So but it does put the focus on on, you know, certainly some of the private sector numbers. So we're going to get the um ISMs either side of the weekend.
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Chapters
8 chapters
1
How could a US government shutdown impact non‑farm payroll data and markets?
0:01–1:49
2
What does the recent drop in oil prices mean for the energy sector and Australian markets?
1:49–4:43
3
How did the 2018‑2019 US shutdown affect US equity and Treasury markets?
4:43–6:54
4
Which private‑sector indicators will guide markets if payroll data is unavailable?
6:54–9:39
5
How is President Trump’s Gaza peace deal influencing US‑Middle East policy and trade tariffs?
9:39–11:50
6
Why did the People’s Bank of China intervene in the yuan fixing and how does it affect the Aussie dollar?
11:50–14:59
7
What are OPEC+ production plans and how might a global oil surplus impact prices?
14:59–17:02
8
Will the RBA hold rates until May despite upcoming CPI and inflation data?
17:02–19:23