U.S. debt peaks, capital migration, data vacuum conceals the truth

Asian Market Trends

On Tuesday, due to market concerns about the deterioration of the U.S. labor market, the U.S. dollar index continued to decline and plunged sharply before the U.S. session. However, it recovered some of its losses during the U.S. session. As of now, the U.S. dollar is quoted at 99.56.

According to statistics from the U.S. automatic data processing www.uniff.orgpany ADP, in the four weeks to October 25, the U.S. private sector lost an average of 11,250 jobs per week. Goldman Sachs estimates that the U.S. non-farm employment dropped by about 50,000 in October, which will be the largest decline since 2020.

The U.S. Senate voted to pass the temporary appropriations bill, and the House of Representatives is reported to start voting on the bill at 5 a.m. Beijing time on Thursday.

Russian Foreign Minister Lavrov: Russia is willing to participate in preparations if the United States restarts its proposal for a summit meeting.

Sources: A 15% tariff agreement between Switzerland and the United States may be reached as early as Thursday or Friday.

There are rifts within the British ruling party, and Health Secretary Wes Streeting is accused of plotting to oust Prime Minister Starmer.

Thailand Prime Minister Anutin reiterated that he will no longer abide by the Thai-Cambodian Joint Peace Declaration.

Summary of institutional views

JPMorgan Chase: The U.S. government is counting down to restarting. What will be the price of a record-breaking shutdown?

The U.S. government is making progress in ending the shutdown. Senate recentWith House Speaker Johnson giving members 36 hours to return, the House of Representatives vote is expected to be held on Wednesday or Thursday. That would clear the way for the government to reopen on Thursday or Friday, a shutdown that would last just over six weeks.

The agreement to end the shutdown does not include enhanced subsidies under the Affordable Care Act that Democrats have insisted on, which are scheduled to end in January. The Republican Party has promised to hold a vote on this in December, but it is difficult to predict whether it will pass. Although the total amount of these subsidies is small, it will intensify people's concerns that the K-shaped household expansion model may drag down the economy.

This round of government shutdown will have a negative impact on U.S. GDP growth in the fourth quarter, but it will boost GDP growth in the first quarter of next year. The Congressional Budget Office's latest estimate is that the six-week shutdown will reduce fourth-quarter growth by 1.5 percentage points, while boosting first-quarter growth by 2.2 percentage points. This estimate is based on: (1) The furloughs of 650,000 federal employees have resulted in a reduction in government working hours, resulting in a loss of consumer spending; (2) the procurement of government goods and services suspended during the shutdown will be fully replenished after the resumption of work; (3) there is a 50% risk that Supplemental Nutrition Assistance Program benefits will be suspended after October 31. Because some states advanced funds during the litigation, there is still a 50% chance that they will not be disbursed, resulting in some people receiving full subsidies, some receiving partial subsidies, and some not receiving them at all.

www.uniff.orgparing the two-week shutdown in October 2013, we are similar to the Fed’s assessment of the drag on GDP at that time. However, due to the shorter duration of this shutdown, apart from the 0.15% drop in the contribution of federal non-defense spending to GDP from the previous quarter and the 0.1% drop from the same period last year, it is difficult to clearly show other effects in the actual data - this is minimal www.uniff.orgpared to the overall estimated effect. Therefore, it is difficult to verify whether the impact on GDP actually reaches the estimated magnitude.

After the government statistical agencies restart, we will soon have a roadmap for the release of economic data for September, October, November and the third quarter. Although we can refer to the precedent of the shutdown in October 2013, due to the large difference in the duration of this time (although the shutdown in 2018-19 lasted for more than one month, the statistics agency's funds were not cut off), the historical experience reference is limited. The estimated release schedule of important data is as follows, and we will continue to adjust it as information is updated.

Analyst Barbara Rockefeller: The basic trend of a weakening US dollar has not changed. Does the overdue credit card problem mean that the crisis has just begun?

What we have not mentioned before is that the Atlanta Fed will release its latest third-quarter GDPNow forecast on Friday. Could the data show another 4% growth like last week? Bloomberg Economics' forecast was 1.4%. It is worth noting that this has not triggered widespread discussion, especially in the context that official data will not be released until mid-December. Regardless of Treasury bond trends or Trump's policies, strong growth is always positive for the dollar.

Another neglected issue is income inequality. Nowadays this is packaged as an “affordability” issue, but the substance is quite different – ​​that statement only applies to low-income groups. when the topWhen 10% of the population bears 50% of consumer spending, why does no one pay attention to its inherent instability? Regardless of fairness, in an economy where consumption accounts for two-thirds of GDP, weakening the spending power of low-income groups will constitute a long-term drag on the economy. At present, the amount of credit card overdue (90 days) accounts for 12% of the total size of US$1.2 trillion, reaching the highest level since 2010. The New York Fed claims that delinquency rates have not yet climbed, but that just means the crisis is just budding.

Bloomberg and Reuters both reported today that carry trades and hedging operations have slowed the decline of the US dollar. But next year the situation may be www.uniff.orgpletely different.

Despite various hedging techniques, the basic trend of a weaker dollar has not changed. The need for skill to guard against Trump's actions masquerading as policy speaks for itself. The trend of the US dollar index may be confusing. It is recommended to pay attention to international spot gold at the same time - the negative correlation between the two has reasonable logic.

France’s Natixis: The European Central Bank’s confidence to maintain the status quo has increased, and Europe and the United States are targeting...

The latest economic performance of the Eurozone exceeded expectations, with a growth of 0.2% in the third quarter, of which Spain once again contributed +0.7% growth, and France brought surprises with +0.5% growth. The IFO business climate index rose to its highest point since 2022, PMI data rebounded for the first time in 17 months, and automobile sales maintained a growth of over 11% for three consecutive quarters (electric vehicles increased by 30%). Industrial orders are rebounding strongly, and the number of unemployed youth in Europe has decreased by 79,000 www.uniff.orgpared with last year.

France performed particularly well: despite the lively political scene, its economy still achieved a growth of 0.5% (previous value of 0.2%), the highest growth rate in two years. Industrial output increased by 0.8%, exports climbed by 2.2%, business investment increased by 0.9%, and consumption increased slightly by 0.1%. After adding 52,000 jobs in the second quarter, the unemployment rate fell by 1% in the third quarter, and business registrations increased by 2.7% year-on-year. Based on this, we have raised our full-year growth forecast for France from 0.7% to 0.9%.

In view of this, we have simultaneously adjusted our expectations for the ECB’s policy path and now expect the status quo to be maintained at the December meeting. Unless there is a major change in the macro environment (no sign of which is currently seen in leading indicators), this judgment will not change. The central bank is more confident in growth (risks have declined), and inflation risks are considered balanced in both directions. The inflation rate in October was 2.1%, close to the target level. In short, the burden of proof has shifted, and the probability of maintaining the status quo is as high as 70%.

The impact of interest rate differentials is weakening (although a rate cut is still our baseline expectation, the probability of a Fed rate cut in December has reduced), growth dynamics and capital flows have become dominant factors, so we fine-tune our annual target for EURUSD to 1.18.

Goldman Sachs: The risk of layoffs in the United States is accelerating, and multiple indicators show that the probability of a sharp increase in the unemployment rate has doubled

Recently, many well-known www.uniff.orgpanies have announced large-scale layoffs, triggering market concerns about further developments in the labor market.Weak worries. In the current context where the recruitment rate continues to be low and it is increasingly difficult for unemployed people to re-employ, the upward trend in the number of layoffs is particularly worthy of vigilance.

The following is an observation of the current layoff situation from multi-dimensional data:

1. Challenger report: The number of layoffs in the private sector in October has risen to a record high outside of the recession. Even excluding individual large-scale layoff announcements that may have been double-counted, the upward trend remains clear.

2. WARN notice: Our real-time tracking of the "Worker Adjustment and Retraining Notice" shows that the relevant data has risen to the highest level since 2016 (excluding the abnormal peak in the early stages of the epidemic).

3. Industry distribution: Although no clear evidence has been found that artificial intelligence is a direct driving factor, the technology industry showed significant growth in both Challenger and WARN indicators in October.

4. Lagging indicator reference: The number of initial applications for unemployment benefits, which is more representative but usually lags behind layoff announcements, is still at a low level.

5. Public opinion trends: Through tool monitoring, we found that discussions related to layoffs have increased recently. This phenomenon was particularly obvious in the third quarter 2025 financial report conference call.

We constructed a "Comprehensive Layoff Tracking Index" based on Challenger announcements, WARN notices, initial jobless claims, and financial report meeting mention rates. The index rose in October and is now above pre-pandemic levels. Quantile regression analysis based on the layoff index, net employment growth (excluding break-even employment growth) and labor market slack shows that the risk of labor market deterioration has increased in the near future. The probability that the unemployment rate will rise by more than 0.5 percentage points in the next six months has now reached 20%–25%, which is significantly higher than the 10% rate six months ago.

The above content is all about "[XM Foreign Exchange Market www.uniff.orgmentary]: U.S. debt peaks, capital migration, data vacuum conceals the truth". It is carefully www.uniff.orgpiled and edited by the editor of XM Foreign Exchange. I hope it will be helpful to your trading! Thanks for the support!

Only the strong know how to fight; the weak are not even qualified to fail, but are born to be conquered. Hurry up and study the next content!