Stocks firm as US government shutdown set to lift
Stocks and gold took a breather on Thursday as the US Congress voted to end the longest government shutdown on record and markets awaited the re-release of US economic data to gauge the outlook for interest rates.
US stock futures are trending sideways.
Japan’s Nikkei index strengthened 0.5 percent but the broad Topix index climbed almost 1.0 percent to a record high as investors shifted portfolios away from the frothiest AI companies to expand into other parts of the economy.
Similar movements occurred overnight, with the gold price jumping above US$4,200 ($6,419) per ounce and a modest rise in US 10-year bonds yielding 4.067 per cent.
The White House said that US President Donald Trump, who is expected to host Wall Street executives for dinner on Wednesday, will sign a bill that will end the government shutdown at 21.45.
Economists predict that delayed economic data will likely be released next week, and the focus is on whether it will support private surveys showing softness in the job market.
“One of the discussions right now is about reopening; we need to get a lot of data that will give more clarity to (Federal Reserve Chairman Jerome) Powell saying, ‘That’s why I’m cutting rates,'” said Damian Rooney, director of institutional sales at Perth-based broker Argonaut.
Volumes were slightly light in the Australian market but there was a bid for lithium and gold miners as low interest rates attracted buyers to gold, he said.
“That means these guys are taking a lot of sweets in Australian dollars. I think we’ve got a bit more legs there,” Rooney said. In Australia, most other sectors fell and the index fell 1.0 percent.
Hong Kong’s Hang Seng index eased slightly from a one-month high and the Shanghai Composite index rose 0.1 percent.
On Wall Street, the Dow Jones index reached a record high overnight, while the technology-heavy Nasdaq retreated.
The mining-heavy FTSE 100 in London closed at a record high. Bank shares also helped the pan-European STOXX 600 index reach record highs, while Italy’s FTSE MIB index reached its highest level in almost a quarter-century.
Japan has come under fresh pressure as its new prime minister urges the central bank to slow down on further interest rate hikes. It fell to a record low of 179.49 per euro and was near a nine-month low against the dollar at 154.94.
The yen touched 155.05 against the dollar on Wednesday, prompting the finance minister to remind investors that the government is watching the market closely as a prelude to possible intervention.
Bank of Japan Governor Kazuo Ueda appeared before parliament on Thursday and said headline inflation was slowly moving towards the bank’s target.
In currency trading, the Australian dollar rose after data showed employment increased in October, supporting the view that the easing cycle there may have run its course.
The Aussie was last up about 0.2 per cent at US$0.6552 ($A1.0014) and expectations for cuts in May have fallen from around 70 per cent to 32 per cent.
US Treasury bonds were stable. Brent crude oil futures fell to a three-week low of US$62.48 ($A95.49) a barrel after OPEC changed its forecast to forecast a small surplus in oil demand for 2026.
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