Global markets surge as US shutdown deal nears Senate breakthrough

Global markets rallied on Monday on hopes that the United States was nearing the end of its historic 40-day government shutdown. Stocks surged across Asia, Europe, and the US, while government bond yields climbed and the dollar steadied.

The US Senate on Sunday advanced a measure to reopen the government and fund operations until January 30, alongside a package of three full-year spending bills. The progress lifted investor sentiment, with Nasdaq futures up 1.5 per cent and S&P 500 futures rising 0.95 per cent.

European and Asian stocks surge

European markets joined the rally, with the pan-European STOXX 600 gaining 1.4 per cent and Diageo shares jumping after the company named a new CEO.
In Asia, MSCI’s broadest index of Asia-Pacific shares outside Japan rose 1.3 per cent, while Japan’s Nikkei added 1.26 per cent.

‘Positive signal for markets,’ say analysts

“A possible end to the longest-running US shutdown is a positive for markets,” said Prashant Newnaha, senior Asia-Pacific rates strategist at TD Securities. “The next step is likely a House vote on Wednesday, with the government reopening by Friday.”

If approved by both chambers, the bill will head to President Donald Trump for his signature — a process that could take several days. The prolonged shutdown has strained the US economy, leaving thousands of federal workers unpaid and disrupting key functions.

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Shutdown weighs on US economy

White House economic adviser Kevin Hassett warned that fourth-quarter GDP could turn negative if the shutdown continued. Consumer sentiment has also slipped to a three-and-a-half-year low in early November, adding to economic concerns.

Investors eye balanced strategy

Mark Haefele, chief investment officer at UBS Global Wealth Management, said investors should balance risk through diversification. “The combination of Fed easing and robust corporate earnings remains favorable for stocks, while quality bonds offer appealing risk-reward,” he said. “Under-allocated investors should add exposure to transformational growth trends like AI.”

Gold, oil extend gains

Gold climbed over 2 per cent to a two-week high of around $4,079 an ounce, supported by weak US data, expectations of Fed rate cuts, and a softer dollar.

Oil also gained ground, with Brent crude up 53 cents to $64.16 a barrel and US crude rising to $60.28.

Bonds and currencies steady

US Treasury yields edged higher, with the benchmark 10-year yield up 4 basis points to 4.13 per cent amid a global risk-on mood. The dollar strengthened 0.42 per cent against the yen to 154.09 and held steady against the euro and sterling. Markets are now pricing in a 63 per cent chance of a December Fed rate cut, even as officials remain cautious.