Market sentiment stayed mildly positive early Monday as trade-friendly actions between the U.S. and China and the Senate’s first vote to reopen the government boosted optimism. China’s inflation data, comments from the Bank of Japan (BoJ), Japan’s stimulus outlook, and dovish remarks from the Reserve Bank of Australia (RBA) also supported the tone.
The U.S. government shutdown appeared near an end after the Senate passed the first vote 60–40 to reopen the government. Centrist Senate Democrats agreed to a stopgap deal to fund key agencies through January 30, with back pay for federal workers and restored state transfers. Some departments will get full-year funding, though the House vote may face resistance from both Democratic and Republican factions. Still, with at least eight Democratic votes in favor, a resolution seems close. The Senate reconvenes at 8 p.m. Eastern time, and the measure is expected to pass soon.
Meanwhile, U.S. Transportation Secretary Sean Duffy warned that air travel could fall to a “trickle” before Thanksgiving, with over 4,000 delays and cancellations projected to rise to 10% by week’s end. Economists Bessent and Hasset said the shutdown’s economic toll is worsening, raising recession risks.
The Office of the U.S. Trade Representative (USTR) suspended its Section 301 investigation into China’s targeting of maritime, logistics, and shipbuilding sectors for dominance for one year, effective November 10, 2025. China also suspended export restrictions on gallium, germanium, antimony, and related critical materials to the U.S. until late 2026 and paused special port fees on U.S.-linked vessels for one year. These steps, along with Washington’s suspension, signal improving trade relations.
However, CNN reported that satellite images show China’s missile buildup accelerating since 2020, suggesting ongoing geopolitical tension and possible increases in U.S. and allied defense investment.
China’s gold exchange-traded funds (ETFs) rose 164% in the first nine months of 2025 as the central bank extended gold purchases for an 11th month, raising reserves to 2,303.5 tons. Output grew 3.6% year-on-year, but consumption fell 7.9% to 682.7 tons amid weak jewelry demand and cautious household spending.
China’s October inflation data showed modest improvement. Consumer Price Index (CPI) rose 0.2% year-on-year and month-on-month, beating expectations of 0.0%, while Producer Price Index (PPI) fell 2.1% year-on-year, slightly better than -2.2% expected. CPI remains near deflation, and producer prices have now declined for 37 straight months, showing a slow recovery path.
The BoJ’s October meeting summary indicated growing confidence in wage momentum, with most policymakers supporting a near-term rate hike if conditions remain stable. Two members called for an immediate hike, while Governor Kazuo Ueda urged patience. BoJ Policy Board Member Junko Nakagawa said the Bank expects to continue raising rates as the economy and prices improve, emphasizing a data-driven approach to confirm durable inflation trends.
Japanese Prime Minister Sanae Takaichi said the government will maintain its primary balance target for fiscal 2025 but may set a new long-term fiscal goal. She ruled out an immediate sales tax cut but did not exclude the option for the future, stressing that any change would depend on wages and inflation. The government plans significant stimulus to support growth while restoring market trust in Japan’s finances.
In the UK, a Chartered Institute of Personnel and Development (CIPD) survey showed employers expect 3% pay rises next year, though one in six firms anticipate job losses from artificial intelligence (AI) adoption. Hiring remains slow, and businesses are urging the government to avoid new taxes that could hinder recruitment.
RBA Deputy Governor Andrew Hauser said Australia’s economy remains tighter than usual for a recovery, leaving limited room for further easing. He stressed that policy must stay restrictive to control inflation until the output gap narrows, calling for more productivity and investment to expand supply, while noting that future rate cuts are still possible.
The U.S. Dollar Index (DXY) paused a three-day losing streak after its first weekly loss in three weeks, but lacked recovery momentum. Gold reached a two-week high, while USDJPY and AUDUSD rose for a second day. EURUSD and GBPUSD ended their three-day rallies, NZDUSD rebounded from a seven-month low, and USDCAD fell for a second session. WTI Crude Oil, Bitcoin (BTC), and Ethereum (ETH) all extended gains for the second day.
USDJPY extended Friday’s recovery even as the Bank of Japan’s (BoJ) October meeting summary appeared slightly hawkish. The Yen’s movement was likely influenced by Japan Prime Minister Sanae Takaichi’s comments hinting at further stimulus and by overall optimism driven by expectations of the U.S. government reopening and improving U.S.-China trade relations.
Even as market sentiment improves, EURUSD and GBPUSD halted their three-day rallies after posting their first weekly gain in three, as the USD recorded its first daily rise in four sessions despite limited momentum. Geopolitical tensions in Europe, weak UK employment data, and caution ahead of the November 26 British Budget are also weighing on both pairs.
With market sentiment staying positive, risk-sensitive currencies like the Antipodeans remain supported, helped by upbeat data and news from China. AUDUSD rose for a second straight day despite dovish remarks from RBA Deputy Governor Andrew Hauser, while NZDUSD rebounded from its lowest level since early April, ending a two-day decline. USDCAD fell for the second consecutive session amid stronger risk appetite and a rebound in crude oil, Canada’s main export.
Gold cheers the market’s cautious optimism by hitting a two-week high, up for the fourth consecutive day, despite slightly firmer USD. Adding strength to the precious metal could be gold-linked data from China, showing strong central bank and ETF demand from one of the world’s biggest customers.
Elsewhere, Crude Oil also extends Friday’s recovery amid receding fears and concerns that the easing tensions could help improve the energy demand, while the looming geopolitical tensions could test supplies despite OPEC+ moves.
Bitcoin (BTC) and Ethereum (ETH) rose for a second consecutive day after a two-week decline, supported by the market’s risk-on sentiment and recent rebounds in equities across the U.S. and Asia-Pacific regions.
Monday’s market performance could be eventful as U.S. traders focus on political developments aimed at ending the historic government shutdown. Market reaction to the latest U.S.-China trade-friendly actions will also be closely watched. These factors may support further gains in risk assets such as USDJPY, AUDUSD, equities, and cryptocurrencies, while Gold could stay firm amid mixed signals. If U.S. policymakers overcome potential hurdles in the House of Representatives, Wall Street may rally, helped by renewed optimism and attention on Warren Buffett’s farewell letter. However, any setback could quickly dampen sentiment, so traders should stay cautious. A government reopening would also release a backlog of U.S. economic data, adding uncertainty to the outlook for a potential Federal Reserve rate cut in December, which had previously supported the USD.
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