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There were no major economic reports printed during the Asian session, so traders only had the U.S. government shutdown to price in. So why did the dollar RISE?

  • Germany’s SPD to begin formal coalition talks with Merkel
  • Senate postpones scheduled stopgap spending bill vote from 1:00 am Monday to 12 noon Monday EST

Major Events/Reports:

Dollar takes a dip

As expected, the Greenback gapped lower against its major counterparts after the U.S. government officially shut down on Saturday midnight.

Fortunately for the Greenback, the downside move only lasted a couple of hours before the tides changed and turned in its favor.

See, market players are convinced that the shutdown won’t last for long and, if it did, it would hardly make a dent on the Fed’s hawkish bets for the year. This is why some traders went “bargain” hunting and pushed the dollar higher across the board.

Of course, it also didn’t hurt that U.S. 10-year Treasury yields extended Friday’s uptrend and hit a three-and-a-half-year high of 2.672% before levelling off a bit.

Mixed equities trading

Dollar traders might have shrugged off a U.S. government shutdown, but other Asian bourses aren’t feeling so confident.

  • Nikkei dipped by 0.13% to 23,777.8;
  • Australia’s A SX 200 is down by 0.35% to 5,992.5, and
  • Hang Seng is down by 0.04% to 32,240.8. Meanwhile,
  • Shanghai index is up by 0.22% to 3,495.405.

Commodity prices were a bit chipper. Gold found some support in the dollar’s early losses, while speculations that OPEC’s deal could last well past 2018 has supported oil prices some.

  • Gold is up by 0.01% to $1,331.17;
  • Brent crude oil is up by 0.19% to $68.85, and
  • U.S. WTI is up by 0.06% to $63.49.

Major Market Mover(s):

USD

The Greenback gapped lower across the board before profit-taking, bargain-hunting, and a bit of risk aversion eventually pushed the low-yielding currency higher.

EUR/USD is down 42 pips (-0.34%) to 1.2229;
GBP/USD is down by 22 pips (-0.16%) to 1.3872;
USD/JPY is up by 21 pips (+0.19%) to 110.79, and
USD/CHF is up by 15 pips (+0.16%) to .9625.

Watch Out For:

  • 11:00 am GMT: German Bundesbank monthly report