LONDON — Caution prevailed in world markets on Tuesday, with the dollar and equities slipping and gold hitting another record high amid fears a US government shutdown could delay key jobs data.
The dollar was broadly weaker, European stocks were lower in early trade and US equity futures , fell a day after US Vice President JD Vance said the government appeared “headed to a shutdown” after little progress in budget talks between President Donald Trump and Democratic opponents.
A government closure would delay the issue of Friday’s key employment numbers, putting the spotlight on the Labor Department’s JOLTS report on August job openings due later on Tuesday. It could also complicate the outlook for the Federal Reserve, which cut rates earlier this month.
“We are seeing a bit of concern about how the next few days play out, it seems like both sides are accepting that a shutdown is inevitable,” said James Rossiter, head of global macro strategy at TD Securities in London.
“The worry here is that if there is a shutdown, it could be long and if we don’t get Friday’s jobs report or the next CPI number, where does the Fed sit?” he said, referring to US inflation data.
The pan-European STOXX 600 index was last down around 0.2 percent, while Japan’s Nikkei closed down 0.25 percent. MSCI’s broadest index of Asia-Pacific shares outside Japan (.MIAPJ0000PUS), however, rose almost 0.5 percent, poised for a gain of over 5 percent this month.
China’s blue-chip CSI300 Index also rose almost 0.5 percent, set for a fifth straight month of gains in its longest such streak since October 2017.
A stellar rally in world stocks could ebb if the prospect of a prolonged shutdown emerges, weighing on US economic growth. US stocks look set to end September more than 3 percent higher (.SPX), while European shares have gained almost 1 percent this month.
Australia’s dollar added to gains after the central bank held policy rates unchanged, as widely expected, and oil prices fell over 1 percent on prospects for greater production by OPEC+, while China’s manufacturing activity shrank for a sixth month in September.
US shutdown worries added to gold’s stunning rally. The precious metal hit a new record high of $3,820 per ounce and has risen over 12 percent in September – on track for its biggest monthly percentage gain since November 2009.
Without a deal, a US government shutdown would begin from Wednesday, the same day new US tariffs are set to take effect on heavy trucks, patented drugs and other items.
The White House announced revised tariffs on furniture and cabinets late on Monday that are due to kick in on October 14.
All this left the dollar on the defensive.
The US currency was down 0.4 percent at 147.95 yen , the euro was up 0.1 percent at $1.1742, while the Swiss franc and pound were also a touch firmer against the dollar.
The dollar index was last down 0.1 percent on the day and set to end September little changed on the month.
