Pulais: The U.S. government shutdown has led some investors to begin reducing risk

The U.S. federal government is currently in a shutdown, and Blerina Uruci, Chief U.S. Economist at Plante Moran, stated that the market is expecting delays in the release of important economic data, including the employment data on October 3rd. This poses challenges for the data-dependent Federal Reserve, especially as investors assess the timing and likelihood of future rate cuts. The Fed may need to rely on less complete indicators such as ADP private employment and initial jobless claims, adding more uncertainty to the policy outlook. The lack of data transparency could exacerbate short-term market volatility, making it difficult for investors to establish confident positions. The market generally expects non-farm payrolls to increase by about 50,000, but there may be upside risks due to seasonal factors. However, the overall trend remains weak, with employment growth for the year expected to stay below 100,000, further reflecting a cooling labor market. In light of these uncertainties, the market outlook is becoming increasingly difficult to assess, and some investors have begun to reduce risk