30 am – a 0..4% increase from Thursday’s closing level. However, the underlying sentiment remains muted, shaped significantly by the ongoing ramifications of the protracted US government shutdown.
Analysts are highlighting the unprecedented disruption to economic data releases as a primary concern. The extended closure has delayed the publication of key US employment figures, with the September data only recently released and November’s numbers not expected until December 16th – well after the Federal Reserve’s upcoming interest rate decision. This data vacuum is fueling uncertainty and hindering a comprehensive assessment of the American economy’s trajectory.
“The longest shutdown in US history continues to exert a tangible influence” stated Thomas Altmann of QC Partners. “We’ve now seen three consecutive first Fridays of the month without US labor market data. This situation is creating a complex environment for investors.
Throughout this week, the DAX has demonstrated a lack of decisive momentum, oscillating between positive and negative days. A sustained year-end rally has yet to materialize, as investors appear hesitant to embrace significant risk. Profit-taking frequently emerges as the market attempts to gain traction, dampening potential upward swings. This cautious approach underscores a broader risk aversion prevalent in the market ahead of critical events.
Despite the restrained buying enthusiasm, the market isn’t signaling an imminent collapse. Altmann points to the VSTOXX volatility index, a leading European measure, which plumbed a three-month low yesterday, indicative of unusually low market anxiety. This suggests underlying stability, albeit one built on a foundation of uncertainty.
The euro strengthened slightly against the dollar, trading at $1.1660, reflecting a minor shift in currency dynamics. Gold prices saw a moderate increase, benefitting from the prevailing climate of economic unease, reaching $4,224 per ounce. Crude oil prices also edged upwards, adding to the mixed picture of global commodity markets.
The situation is particularly noteworthy as it raises questions about the Federal Reserve’s ability to make informed policy decisions in the absence of timely economic data. Critics argue that the shutdown’s long-term impact extends beyond mere data delays – it undermines the credibility and effectiveness of both government agencies and financial institutions.