Barclays analysts warn that the approaching US government shutdown carries risks that extend beyond politics, with markets more concerned about the impact delays can bring to vital economic data. Each week of shutdown is estimated to shave 0.1 percentage points off GDP, losses that are usually recovered but more troubling now since labour markets are not in optimal conditions. Uniquely, President Trump has threatened to make some federal furloughs permanent, a sharp break from past practice where employees were always reinstated. Economists estimate the shutdown could cost the economy about $7 billion per week while also delaying Bureau of Labour Statistics reports the Federal Reserve needs for policy decisions. The deadlock stems from Republican demands for spending cuts versus Democratic insistence on extending health care subsidies, with Vice President JD Vance saying a shutdown looks inevitable. Beyond the numbers, the standoff risks damaging business and consumer confidence, potentially causing deeper and longer-lasting harm than previous shutdowns.

EQUITY

Wall Street opened the week higher as technology and AI-related stocks drove gains with Nvidia's 2%, given renewed optimism around Federal Reserve rate cuts. Markets shrugged off government shutdown risks as investors focused on positive catalysts, including Electronic Arts' $55 billion takeover deal and cannabis stocks after Trump's cannabidiol endorsement sent Tilray up over 60%.

GOLD

Gold smashed through record highs and is still climbing as Washington's shutdown impasse over healthcare spending threatened to replicate the 2018-19 shutdown's $11 billion disaster, compelling investors to seek sanctuary in bullion, while easing Federal Reserve policy eroded dollar supremacy. The flight to safety resonated across precious metals, with silver and platinum soaring 30% and 18%, respectively, after breaching decade-long thresholds.

OIL

OPEC+ projected production increase of at least 137,000 barrels per day in November pushed oil lower, extending Monday's 3% decline as markets grappled with mounting supply concerns. Iraq's resumption of Kurdish crude exports through Turkey after a 2.5-year halt added to the risk. Meanwhile, demand anxieties have grown as China's manufacturing sector contracted for the sixth consecutive month and U.S. government shutdown risks loom that could affect supply chains.

CURRENCY

The U.S. dollar fell ahead of a likely government shutdown at midnight that would delay critical economic data including the September jobs report, while markets are scaling back rate-cut odds. The decline lifted the Australian dollar, gaining 0.5% ahead of the RBA's rate decision, and the yen, outperforming on the rumoured Bank of Japan rate hike in December. Analysts warn that while short shutdowns have a limited impact, prolonged outages could push the Fed toward more accommodative policy.