Market focus this week will be on Washington D.C. as Senate talks gather momentum for ending the US government shutdown. The Senate adjourned early Saturday evening, but is expected to reconvene on Sunday. With Thanksgiving approaching on 27th Nov, Trump along with Republicans & Democrats will be under pressure to end the longest shutdown in history. Our base case remains that the shutdown will end this week, but exact timing is highly uncertain. Assuming that the government opens on Monday, we can expect Sep NFP report by Friday. Oct NFP, Nov NFP & Oct CPI might not come before 10th Dec FOMC meet. Our estimate for Sep NFP is at 60k as we have detailed in our earlier report released on 27th Sep. For now, our view is that Dec meeting looks a hold because Fed won’t have data before it meets. We are bullish on S&P500 in short-term expecting a year-end rally due to reopening theme, SCOTUS likely reprieve on IEEPA tariffs and strong earnings. We are bearish on long end USTs now considering the SCOTUS outlook on IEEPA tariffs as well as an expected risk on going into the year end. In dated UST auction supply, we have 58 BN USD of 3yr USTs on Monday, 42 BN USD of 10yr USTs on Wednesday & 25 BN USD of 30yr USTS on Thursday. There is no major US macro data release this week due to US government shutdown. In European macro data, we have Sentix survey & Zew this week. In UK we have the labor wage data on Tuesday. China has a series of economic data points this week across credit, investments, retail sales & industrial production.
