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Asian shares and gold rise amid US shutdown fears; crude oil falls

On Tuesday, shares in Asia rose and gold's record rise continued as markets assessed the prospects of a U.S. shutdown that could delay closely-watched jobs data.

The Australian dollar gained before the Reserve Bank of Australia meeting, where they are expected to maintain their current policy. Oil prices fell due to the prospect of increased production by OPEC+. Meanwhile, China's manufacturing activity declined for a sixth consecutive month in September.

After little progress was made in budget negotiations between Donald Trump and Democratic opposition, U.S. vice president JD Vance stated that the government "seemed to be headed for a shutdown".

The government shutdown would prevent the publication of important employment figures later this week. Instead, the Labor Department will release its JOLTS report for August job openings on Tuesday.

Ray Attrill said in a podcast that it appears the markets are preparing for the possibility of a shutdown. If we don't get payroll numbers, we can focus on what we have.

MSCI's broadest Asia-Pacific share index outside Japan rose 0.5% at the start of trading. This would make it the best month in a decade, with a gain of 5.6%. Japan's Nikkei index fell 0.3% for the third consecutive day.

After a 0.6% drop on Monday, the dollar was unchanged at 148.62yen. The euro remained unchanged at $1.1723. The Australian dollar rose 0.2% against the greenback, to $0.6587.

SHUTDOWN COULD LEAVE FEED WITHOUT KEY DATA

The Federal Reserve uses the U.S. JOLTS Report as the first indicator to be considered before the Friday employment report. This report is crucial in determining the timing for rate cuts. If the Fed is left in the dark about the economy, it could be difficult for them to make decisions at their October 29 meeting.

Analysts expect JOLTS data to show that job openings remained stable at 7.18 million jobs in August.

Capital.com analyst Kyle Rodda said in a recent note that the shutdown could delay the release certain data. This includes the important non-farm payrolls reports.

The primary focus of market participants at the moment is the future path for U.S. Interest Rates. Asset prices are supported by the idea that there will be a reduction in interest rates and it could be relatively deep.

A U.S. shutdown without a deal would start on Wednesday, the day that new U.S. Tariffs were supposed to take effect for heavy trucks, patented medicines and other items. White House announced new tariffs for furniture and cabinets on Monday night. They are set to take effect on October 14.

China's purchasing manager's index (PMI), a measure of economic growth in Asia, rose to 49.8 from 49.4 in august, just below the 50-mark that separates growth and contraction. This suggests that producers are waiting on further stimulus measures to boost domestic demand as well as clarity regarding a U.S. Trade Deal.

Gold reached a record high of $3,843.49.

The oil price remained lower due to the anticipated increase in production by OPEC+, and the resumption from Iraq's Kurdistan Region of oil exports. U.S. crude oil fell 0.6%, to $63.07 per barrel. Brent crude dropped 0.6%, to $67.51 a barrel.

Early European trading saw the Euro Stoxx futures down 0.11% to 5,524, German DAX Futures down 0.07% to 23,890 and FTSE Futures down 0.06% to 9,355.

(source: Reuters)