Asian investors buoyed by plans to end US shutdown

In Asia, data on the docket for release Tuesday includes business confidence in Australia, New Zealand inflation expectations and current account balance data for Japan.

Asian stocks were primed to track Wall Street gains as a US Senate plan to end the longest-ever government shutdown renewed investors’ appetite for risk.

Equity futures contracts for Japan and Australia pointed to gains in early Asian trading, though Hong Kong looked little changed. The S&P 500 rose 1.5% on Monday and the Nasdaq 100 added 2.2%, while a gauge of US-listed Chinese companies rallied 2.3%.

Gains for US stocks were accompanied by declines in Treasuries as the White House expressed support for the bipartisan deal to end the shutdown, a key development that makes it likely the government reopens within days. A stopgap funding bill that would end the shutdown was on track to pass in the Senate Monday night.

An index of the dollar weakened on Monday, while gold and Bitcoin rallied. A Bloomberg gauge of commodity prices rose to the highest level since August 2022.

The cross-asset moves were a sign investors were willing to dive back into US tech stocks after recent selling pressure, while others were focused on seeking downside protection in havens like precious metals.

“Reopening would not only boost sentiment, but also open the way for data releases, which could provide more insight into the health of the US jobs market and, more broadly, the US economy ahead of next month’s Federal Reserve interest-rate decision,” said Fiona Cincotta at City Index.

Treasuries are also facing a demand test from this week’s auctions totaling $125 billion. The bond market will be closed Tuesday for Veterans Day.

In Asia, data on the docket for release Tuesday includes business confidence in Australia, New Zealand inflation expectations and current account balance data for Japan.

Taiwan Semiconductor Manufacturing Co. reported slowing growth in monthly revenue as investors debate the sustainability of the AI boom.

Elsewhere, Japanese Prime Minister Sanae Takaichi aims to use her first stimulus package to jump-start the economy and initiate a new growth strategy through investment in key industries.

US President Donald Trump also indicated he would reduce the tariff rate on Indian goods “at some point,” and that the US was “pretty close” to a trade deal with New Delhi.

US Shutdown
Historical precedent from the 2013 shutdown suggests that September’s employment report could be among the first to hit the wires, potentially within three business days of reopening, according to Jim Reid at Deutsche Bank.

Assuming the government reopens and statistics start moving again, Fed officials will still be confronted with data compiled via retroactive surveys and other methods — if the figures are published at all. And while several private-sector reports on the job market are helping to fill the void of official data, alternatives to government inflation figures are harder to come by and more limited in scope.

Even if the government reopened on Friday, it would take a number of weeks before the market received all the data that has been delayed since the beginning of the government shutdown, according to Vail Hartman, Delaney Choi and Ian Lyngen at BMO Capital Markets.

“Moreover, concerns regarding government data quality will likely persist into 2026, leaving the private data of heightened relevance to near-term monetary policy expectations for the foreseeable future,” they said.

“The potential now for some more data in time for the December meeting that could refresh and sustain the picture of a soft labor market with ongoing risk of more serious deterioration makes a cut a bit more likely,” said Krishna Guha at Evercore.

The first piece of labor data – the delayed September employment report – should be released within days of the shutdown ending, though it remains uncertain what October/November data will emerge and when, he noted.