Market Analysis Amid Government Shutdown
Description
In today's Options Trading Concepts Live, Mike, Jermal, and Glen Freibarger from tastyFX discussed market implications of the U.S. government shutdown. Glen presented historical data showing the U.S. dollar typically weakens during shutdowns, with gold often outperforming. While stocks remain relatively unaffected, the dollar has consistently declined about 1% during past shutdowns. The 2018-2019 shutdown (35 days under Trump) saw significant dollar weakness around the two-week mark. With prediction markets suggesting this shutdown could last until mid-October or longer, traders should watch British pound and Japanese yen pairs for potential moves. The shutdown also means no economic reports from agencies like BLS, canceling Friday's nonfarm payroll report and potentially the October 15 CPI release. In FX markets, Glen highlighted the Australian dollar/New Zealand dollar pair showing signs of reversal after New Zealand's recent weakness. Traders discussed the benefits of positive carry positions in FX trading, where overnight financing adjustments can enhance profits. Bitcoin and Ethereum showed strength, both up over 3% for the session.