Markets in the dark as US shutdown halts jobs data

The euro held steady despite ongoing political turbulence in France, where President Macron’s government continues to struggle to maintain stability following a series of ministerial resignations. Rating agencies Moody’s and S&P reiterated concerns about France’s fiscal trajectory, warning that prolonged instability could further pressure European bond markets. The single currency remains capped as investors await commentary from ECB officials on how rising yields might influence near-term monetary policy.

The pound traded softer on Thursday as market participants priced in a growing probability of a rate cut by the Bank of England before year end. Comments from policymaker Swati Dhingra, highlighted slowing domestic demand and persistent weakness in hiring intentions across UK firms. Markets are now fully pricing a 25-basis-point cut by December, leaving the pound vulnerable to further downside should upcoming inflation data confirm the easing trend.

The US dollar remained broadly supported by risk-averse sentiment and safe-haven flows. A fresh standoff in Washington over budget negotiations and government funding weighed on overall market confidence, though Treasuries saw modest demand. Federal Reserve Governor Michelle Bowman, reaffirmed that while inflation progress has been encouraging, the Fed remains data-dependent and in no rush to accelerate rate cuts. The dollar index continued to trade near one-week highs against major peers.