The US government has avoided a federal shutdown after both House and Senate agreed on a short-term funding deal. The last-minute agreement ensures funding until 17 November and helped push US yields higher as markets await a speech from Federal Reserve Chairman Jerome Powell later today. The US labor market has shown signs of cooling in recent months and data released in the coming days is likely to show the pace of hiring slowing towards the end of the summer. Job openings data is due out on Tuesday, initial claims on Thursday and Non-farm Payrolls on Friday.
It is a quiet week ahead for euro data, with EURUSD rallying a touch after dropping to trade below 1.05 at the end of last week. The pair found some support as month end volatility kicked in with support seen at the January low of 1.0484 and initial resistance coming in at 1.0607.
The pound remains in the doldrums with GBPUSD consolidating around 1.22. In a fairly quiet week for UK data, markets will likely focus on the Conservative Party conference which kicks off in Manchester today. Prime Minister Sunak is coming under pressure to cut taxes before the next election; however, the PM has said that his priority was curbing inflation and easing living costs. Support in cable is seen at 1.2180 with a breach of resistance at 1.2250 required to signal any move higher.
Month end activity pushed USDJPY initially lower before the pair rallied to within touching distance of the key 150 area where the market fear intervention. The BoJ announced an extra bond buying plan following an unscheduled operation it concluded on Friday in an attempt to curb sharp increases in yields.
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