First Day After Shutdown Ends Sees a Softer Dollar and Fresh Uncertainties
November 13, 2025
America’s longest federal government shutdown, 43 days in duration, ended last night, only to leave fresh uncertainties in its wake such as the times when many delayed U.S. data reports get released, what such will show, what now happens to the U.S. president’s approval ratings and other domestic political impacts, the lagged fallout on air travel and other key economic activities such as holiday retail sales, what happens next to U.S. health insurance and other costs, and whether another funding crisis emerges when this latest funding bill expires about 80 days from now.
In this new chapter of relentless U.S. political tension, the dollar’s opening move was downward, and equities sputtered. The U.S. currency fell overnight by 0.4% against the Korean won and sterling and by 0.3% relative to the euro, Swiss franc, Mexican peso and Australian dollar. DOW, SPX and Nasdaq futures edged 0.1% lower, while the Russell 2000 points to a slightly larger decline at the open. Stock markets closed 0.5-0.6% lower in Australia and New Zealand and show similar losses so far in Germany, France and Great Britain. Alternatively, equities close 0.4-0.7% firmer in Japan, Hong Kong, China and South Korea.
Ten-year sovereign debt yields are two basis points higher in the United States, U.K., Germany, Italy and Spain but stayed flat in Japan where comments by Prime Minister Takaichi and Bank of Japan Governor Ueda tilted in favor of promoting the growth of wages and economic activity.
Prices for Bitcoin, gold and oil are up 1.4%, 0.7% and 0.6%.
An assortment of disappointing British data were reported this Thursday. A first look at GDP last quarter yielded softer-than-predicted growth of 0.1% from 2Q 2024 and 1.3% year-on-year, down from 1.6% in the first half and following growth averaging just 0.4% in 2023 and 1.1% last year. Monthly GDP ended last quarter with a dip of 0.1% in September, fitting into a pattern of diminishing strength as the quarter went along. Industrial production in September slumped 2.0%, the biggest monthly swoon in 56 months and were 2.5% below the year-earlier level. Construction output rose 0.2% following August’s 0.5% slide and was only 1.3% above the level in September 2024. A report on home prices from the Royal Institute of Chartered Surveyors exuded softness, too, and Britain’s merchandise trade deficit of GBP 18.88 billion in September was was 22% wider than a year earlier.
Industrial production in the euro area, which had dived 1.1% in August, only rebounded 0.2% in the following month, keeping the year-on-year rise at a mere 1.2%.
Europe’s fragile recovery isn’t encouraging central banks there to keep lowering interest rates. Remarks from ECB President and others have encouraged the view that monetary policies are now close to neutral. The National Bank of Serbia‘s latest policy review ended with a decision to keep its key interest rate unchanged at 5.75%, which although at its lowest level since April 2023 was last cut in September 2024. Even though Serbian consumer price inflation of 2.8% was at a 4.5-year low in October, officials
stressed that a cautious monetary policy stance is still necessary as the situation in the international environment remains complex and unstable. Higher tariffs, rising protectionism and persistently uncertain global trade policies, together with heightened geopolitical tensions, continue to shape movements in global commodity and financial markets, keeping them volatile. In addition, geopolitical tensions and growing protectionism may have direct effects on domestic manufacturing output and exports, particularly when it comes to oil and base metals production.
Switzerland’s combined producer price and import price index fell 0.3% on month and 1.7% on year in October, extending the streak of negative year-on-year readings to 30 months. Import prices were 2.7% lower than in October 2024, while domestic producer prices declined by 1.3%.
Better-than-expected Australian labor market statistics for October reported overnight cast new doubt on how soon the central bank there might cut interest rates again. The jobless rate fell by 0.2 percentage points below September’s 46-month high of 4.5% and was accompanied by the largest monthly rise of jobs (42.2k) in six months.
French unemployment reached a 4-year high of 7.7% last quarter.
Inflation among Japanese domestic producer prices for goods ticked down 0.1 percentage point to 2.7%, having been as high as 4.3% last April and May, and import price deflation of 1.5% was much less than the 12.0% slide registered last January.
Swedish consumer price inflation held steady at 0.9% last month, but the core CPIF measure that the Riksbank watches clocked in at 3.1%.
Slovakian CPI inflation has slowed from a 19-month high of 4.4% in July to a 6-month low of 3.7% in October.
In Argentina, another country whose leader is much admired by U.S. President Trump, consumer price inflation fell a half percentage point in October. At 31.3%, there’s still a long way further to go before any semblance of price stability is restored.
Brazilian retail sales dipped 0.3% on month and rose just 0.8% year-on-year in September.
The South African Reserve Bank’s inflation target corridor has been lowered from 3-6% to 2-4%.
Chinese bank lending in October (220 billion yuan) and on-year M2 money growth (8.2%) were lower than anticipated.
Copyright 2025, Larry Greenberg. All rights reserved.
Tags: British GDP and industrial production, Euroland industrial production, Swiss PPI and import prices
ShareThis
