Asian markets opened higher, following a global rally that pushed world indexes to new records, despite the US entering its first government shutdown in nearly seven years. Japan, South Korea, and Australia all traded in positive territory, with the chip and technology sectors providing key support. In Seoul, Samsung Electronics and SK Hynix surged after signing initial supply deals for OpenAI's "Stargate" project. On Wall Street, the S&P 500 rose 0.3% and the Nasdaq 100 added 0.5%, helping lift the MSCI global benchmark index to a new high.

In the bond market, Treasuries maintained their gains after weak private employment data reinforced bets for a Fed rate cut this month. The 10-year US Treasury yield fell 1 basis point to 4.09%, while the Bloomberg Dollar Index held steady. Gold edged lower after briefly hitting a record high.

The shutdown poses a risk of a "data blackout" for the Fed, so market participants are relying on private sector releases like the ADP report, which showed an unexpected decline in September payrolls—bolstering market confidence in two interest rate cuts this year. US factory activity, according to the ISM, is also contracting for the seventh consecutive month, while the JOLTS report indicates cooling labor demand. Several economists, including those at Berenberg, believe the Fed still has enough information to deliver a 25 bps "insurance cut" in October despite the delayed NFP.

However, many investors believe shutdowns are typically short and have a limited impact on the economy. What distinguishes this episode is the talk of permanent layoffs for non-essential federal employees—something that could further strain the public sector if realized. On the other hand, some market participants, such as Citigroup, believe the impact on stocks will only be felt if the shutdown drags on, triggers major layoffs, or there is a shock in the bond market that spills over into equities. Platinum and palladium also weakened.

Source: Newsmaker.id