As it has happened 4 times in the past, near the ending of a US government shutdown, equity markets rallied in Europe. In the US, however, main indices were mixed, with the Nasdaq registering losses as investors remained cautious about too-high valuations of tech companies. Last night, Trump signed into law the spending bill, allowing the US government to reopen.
Sovereign yields fell on both sides of the Atlantic, with the US Treasury yield curve flattening. Peripheral spreads in the eurozone also narrowed, with France leading the way. The dollar continued to depreciate slightly against the euro while the Japanese yen weakened further as Prime Minister Takaichi pleaded for slow rate hikes.
In commodities markets, Brent prices dropped as the OPEC revised its forecasts, reporting now that supply and demand will match in 2026. Gold prices continued to rise, settling now near $4200/ounce, indicating that last week's losses were not a definitive end to its rally in the previous months.