The US Treasury market saw a surge, driven by a weakening job market, while the dollar held its ground. This happened on November 12, 2025. It's a snapshot of how economic indicators and global events can influence the financial landscape.
Treasuries experienced a rise across the board. The yield on the 10-year Treasury note dipped by four basis points to 4.08%. This movement was triggered by private-sector data, specifically from ADP Research, which indicated a slowdown in the US labor market during the latter half of October.
Money markets reacted by increasing their bets on Federal Reserve interest rate cuts, with about a 70% probability of a reduction happening the following month. The dollar's performance remained flat after five consecutive days of losses, and gold prices saw a gain.
But here's where it gets controversial: The US government shutdown played a significant role. With key official economic indicators unavailable, investors turned to private data to assess the economy's strength. The temporary funding measure passed by the Senate, which is expected to end the record shutdown, boosted stocks as investors anticipated a flood of delayed data once government agencies reopened.
Rajeev De Mello from Gama Asset Management highlighted the importance of a clearer understanding of economic data as government functions resume. He also noted that investor positioning is adjusting to a confluence of supporting factors.
The most recent ADP monthly report showed private-sector payrolls increased by 42,000 in October, following declines in the previous two months. Adding to the concern, several companies had announced plans to cut jobs in recent weeks. A report from Challenger, Gray & Christmas Inc. revealed that employers announced the highest number of job cuts for any October in over two decades.
Damien McColough and Uma Choudhury, strategists at Westpac Banking Corp., noted that the market would be influenced by the general risk sentiment and Federal Reserve communications, but they suspected it would struggle to establish consistent directional momentum.
The government's reopening now hinges on the House's decision on the spending package, which is set to keep most of the government open until January 30 and some agencies until September 30. If approved, the bill will go to President Donald Trump, who has already given his endorsement.
And this is the part most people miss: Comparing to the 2013 shutdown, which affected the jobs report, the government reopened on October 17, and the September jobs report was released five days later, as noted by Jim Reid at Deutsche Bank.
The resumption of economic data releases could strengthen the case for increased wagers on rate cuts. Most economists surveyed by Bloomberg anticipate that Federal Reserve officials will lower borrowing costs by a quarter-point at their December 9-10 meeting. However, the central bank's path remains uncertain, as Chair Jerome Powell mentioned last month that a cut isn't a certainty, a sentiment that has been echoed by other Fed officials.
Analysts at Australia & New Zealand Banking Group, including Kishti Sen, suggest that recent US data are consistent with the Fed continuing to reduce interest rates gradually at upcoming meetings, noting growing downside risks to many segments of the US economy.
Corporate News:
- Advanced Micro Devices Inc., Nvidia Corp.'s competitor in AI chips, predicted accelerating sales growth over the next five years.
- FedEx Corp. expects profit this quarter to improve from a year ago.
- A group of investors led by Macquarie Group Ltd. is expected to acquire Potters Industries.
- JD.com Inc. reported a surge in orders during the Singles’ Day event.
- Sea Ltd.’s quarterly profit missed analysts’ estimates.
Market Movements:
- S&P 500 futures rose 0.2%
- Japan’s Topix rose 1%
- Australia’s S&P/ASX 200 rose 0.2%
- Hong Kong’s Hang Seng rose 0.5%
- Shanghai Composite was little changed
- Euro Stoxx 50 futures rose 0.2%
- Bloomberg Dollar Spot Index was little changed
- Euro was little changed at $1.1579
- Japanese yen fell 0.1% to 154.32 per dollar
- Offshore yuan was little changed at 7.1205 per dollar
- Bitcoin rose 0.6% to $103,236.95
- Ether rose 0.9% to $3,445.97
- The yield on 10-year Treasuries declined four basis points to 4.08%
- Japan’s 10-year yield was little changed at 1.685%
- Australia’s 10-year yield declined two basis points to 4.37%
- West Texas Intermediate crude fell 0.2% to $60.91 a barrel
- Spot gold rose 0.2% to $4,133.80 an ounce
What do you think? Do you agree that the government shutdown significantly impacted market sentiment? How do you see the potential impact of the Federal Reserve's decisions on the economy? Share your thoughts in the comments below!
