US Government Reopens, Markets Remain Blind
The 43-day United States government shutdown has finally officially ended after President Donald Trump signed a temporary funding bill. However, even though government offices have reopened, a new problem has emerged: the market is now facing a long gap in official economic data. Market participants, including gold and forex traders, are waiting to see how the US government will catch up with data releases after six weeks of paralysis.
Statistical authorities like the BLS, BEA, and other agencies will not release all delayed data all at once. They are expected to create a new calendar and release reports in stages, prioritizing key data like employment, inflation, and economic growth. This means the next few days and weeks could be busier than usual, but still structured one after the other, rather than a single day of data flooding.
To further confuse the market, some data for October will likely never be released. During the shutdown, household surveys and other data collection were not conducted, potentially canceling important reports like the October jobs report (and unemployment rate) and October inflation data altogether. This gap leaves a "hole" in the economic data stream that analysts and central banks typically rely on.
For the Fed, this gap and data gap could be a reason to be more cautious in determining interest rate action. Without a complete picture of inflation and labor market conditions, it is difficult to be certain whether the economy is weak enough to warrant additional interest rate cuts. On the other hand, financial markets are accustomed to pinning their hopes on official data, so any follow-up release—even if delayed—still has the potential to move the dollar, gold, bonds, and stock indices.
For economic platforms and retail traders, this situation requires technical adjustments and education. The economic calendar for October, particularly for US data, should clearly note that some releases are "canceled due to shutdown" and not simply not updated. While awaiting a new, full schedule of September and November data, market participants will inevitably have to rely more on alternative data, comments from Fed officials, and global sentiment to gauge market direction.(Asd)
5 Key Points:
- The 43-day US government shutdown has ended, but it leaves a gap in economic data.
- Delayed data will be released in stages, rather than all at once.
- Several key October data points, such as the jobs report and inflation, may never be released.
- The data gap makes the Fed's interest rate decision and market direction more uncertain.
- Economic calendars and market participants should pay special attention to October data and rely more heavily on alternative data and guidance from the central bank. (asd)
Source: Bloomberg.com
