(MENAFN- Your Mind Media ) DIGEST&nbs–;– Markets struck a risk-on tone yesterday, with stocks rallying, and Treasuries softening, as an end to the US government shutdown inches closer. Today, UK jobs, and German ZEW data highlights the docket.

WHERE WE ST–ND – It proved to be a decidedly optimistic start to the week for financial markets yesterday, as hopes grew that the record-long US government shutdown may soon come to an end.

A bipartisan deal to re-open the federal government looks to have bee– cut – the GOP wi‘nin’ a ‘3+1’ package to fund federal agencies until 30th January, along with three ‘mini-b’s’ bills to fund the Agriculture & Veterans Affairs departments, plus Congressional operations for the rest of the fiscal year; the Democrats winning the promise of a Senate floor vote on extending Obamacare tax credits, plus a promise from the Trump Admin to rehire federal workers fired at the start of the shutdown last month.

There are still some hurdles to jump on this front, but with the House set to rubber stamp this package before the end of the week, it seems that, at long last, there is a fair bit of light starting to emerge at the end of this particular tunnel.

Assuming, as now looks exceedingly likely, that the government does indeed re-open this week, focus will rather rapidly turn to when we may receive some of the data releases that have been delayed over the last six weeks or so. We should get the September jobs report relatively quickly, given that the data has already been collected, though the timing of employment data beyond that is questionable, with the quality of that data in doubt too, as the BLS will be asking households to recall what their employment conditions were almost a month ago. Oct’ber’s inflation (CPI & PCE) data, meanwhile, may not be released at all, given that no data collection whatsoever took place, with the November also likely to be rather significantly disrupted.

This means that, while some data will be available by the time of the December FOMC, and certainly more than was available for the October confab, policymakers and market participants alike are still likely ‘o be ‘flyi’g blind’, to some extent, for a while yet, with data disruptions set to persist into Q1 26.

Those are all longer-term considerations, however, with markets in the ‘here and n’w’ simply focusing on the fact that for the first time in over a month, there is progress being made on Capitol Hill. Hence, we saw a pretty textbook risk-on day to start the week with stocks gaining ground, Treasuries softening across the curve, and the dollar rolling over a bit. Only gold bucked this classic risk-on vibe, with spot gold rallying well over 2% on the day, reclaiming $4,100/oz in the process for the first time this month, as bullion continues to behave more like a momentum vehicle than demonstrating the risk-on/off dynamics that the textbooks teach us.

Outside of bullion, as mentioned, everything was rather more logical. For equities, not only was news of the shutdown likely soon ending a positive on its own, due to the uncertainty and growth headwinds that can now be priced out, but also if, as is plausible, it leads to a reversal of the recent build in the treasury general account (TGA), and subsequent easing in funding/liquidity conditions.

Add that to what is already a strong bull case (robust earnings growth + resilient underlying economic growth + cooler tone on trade + easier monetary policy backdrop), and I remain confident that the path of least resistance continues to lead to the upside. 7k in spoos by year-end? I remain confident of that, too.

Meanwhile, downside risks appear to be building for Treasuries, most notably at the long-end of the curve. Not only has the (effective) end of the government shutdown sparked some selling pressure, issuance appears to be ramping up too, with hyperscalers increasingly turning to debt sales in order to fund what seems to be an endless pace of capex amid the ongoing AI ‘arms ra’e’. Furthermore, the potential for tariff refunds if the Supreme Court rules against the Trump Admin in the IEEPA case is a downside risk that must also be considered, as is the potential for a growth, and labour market, re-acceleration into the back end of this year, and start of next.

Increasingly, to me, the balance of risks is tilting back in favour of higher yields, and maybe even the 30-year testing 5% once more.

LOOK AHEAD&n–sp;– A light-ish docket ahead today, with the US away for Veterans Day.

We do, though, get the latest UK labour market data this morning, with headline unemployment set to have risen to 4.9% in the three months to September, a new 4-year high, while earnings growth should remain around the 5% mark. Though this pace remains incompatible with a sustainable return to the 2% inflation aim, the BoE have opened the door to a December cut, providing that incoming CPI data behaves itself in the meantime.

Other than that, the latest round of ZEW sentiment surveys are due from Germany, though this hasn’t tended to be much of a market-mover of late, while a host of ECB speakers are due as well, though ’t’s safe to say that none of them will move anything more than a tick or so, at best.

Finally, with today being Remembrance Day, I encourage everyone to pause and reflect, at 11am, to remember those whose service and whose sacrifice allows us to live our lives as we do today. Lest we forget.

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