The weaker Japanese yen could boost carry trades and drive demand for risk assets such as US stock futures.
US Senate Stopgap Funding Bill Vote Looms
Traders remain on edge ahead of a pivotal Senate vote that could prolong fiscal paralysis.
While the yen’s slump lifted sentiment, US stock futures saw modest gains. Uncertainty over the potential impact of the government shutdown on the US economy limited the upside. The 2018-19 shutdown shaved roughly 0.4% off the US GDP. A similar effect on the US economy in 2025 may fuel stagflation risks, potentially weighing on sentiment.
The impasse on a stopgap funding bill continued overnight, extending the government shutdown into its ninth day on Wednesday, October 8. A Senate vote is expected today, with another failed vote likely to add to the economic uncertainty.
Gold price trends reflected growing market unease, climbing 0.65% to $4,010 in morning trading. The Kobeissi Letter commented on gold and oil price trends and potential market stress, stating:
“Gold prices relative to crude oil prices have jumped to 64 points, the highest since the 2020 pandemic. The ratio has TRIPLED over the last 2 years. Excluding the 2020 pandemic drop of crude oil prices, the ratio is now at its highest level in at least 35 years. Historically, an elevated gold-to-oil ratio signaled stress in the global economy or the financial system.”
