Asian Pacific stocks rally

David Morrison

SENIOR MARKET ANALYST

02 Oct 2025

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Asian Pacific stock indices had a strong session overnight, as traders responded to fresh all-time highs across Wall Street. Tech stocks led the advance, with South Korea’s Kospi and Hong Kong’s Hang Seng up 2.7% and 1.6% respectively, while mainland China remained closed for the Golden Week holiday. Gains in the Kospi were helped by Samsung Electronics (+4.7%) and SK Hynix (+12%) following the announcement of partnerships with OpenAI to supply memory chips.

Japan’s Nikkei rose 0.9% while the Australian ASX 200 added 1.1%, supported by broad-based buying. The Hang Seng was also boosted by Zijin Gold, which surged nearly 12% on its third day as a listed company.

The US government shutdown continues for a second day, but has yet to impact financial markets. This is even though government economic data, including today’s weekly Unemployment Claims and tomorrow's Non-Farm Payroll report, won’t be published.

Yesterday, the monthly ADP private payroll update came in well below expectations, confirming weakness across the labour market that had already been picked up by the last two Bureau of Labor Statistics (BLS) Non-Farm Payroll releases.

Investors saw this as increasing the likelihood that the US Federal Reserve will cut interest rates at its next two meetings ahead of year-end. This supported the ongoing rally and took the Dow, S&P 500 and NASDAQ to fresh record closes.

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Fresh records across Wall Street

US stock indices were firmer across the board yesterday in a move which took the Dow, S&P 500 and NASDAQ 100 to new all-time closing highs. The NASDAQ added 0.4%, while the Dow and S&P gained 0.1% and 0.3% respectively. The small cap, domestically focused Russell 2000 ended 0.2% higher, but remained shy of its own all-time high. These gains came even as the government shutdown began, and labour data came in soft.

Source: TN Trader

Investors largely looked past the shutdown, betting it would be short-lived and cause limited economic damage. But the shutdown means that neither today’s weekly Unemployment Claims nor tomorrow’s BLS Non-Farm Payroll report will be published. This means that vital data on the state of the US labour market will now be missing. This can only make life harder for the Federal Reserve ahead of its next monetary policy meeting at the end of this month.

The Fed has made it clear recently that it is concerned about the jobs market following two disastrous BLS payroll reports, along with some thumping negative revisions. Yesterday, the latest monthly update from the privately produced ADP payroll report showed an unexpected loss of 32,000 jobs. Analysts had been expecting a gain of 52,000.

On top of this, the prior report was revised sharply down to minus 3,000 from an initial gain of 54,000 jobs. Investors responded positively to the data, working on the assumption that ’bad news is good news’. The theory behind it is that the Fed is now more likely to cut rates twice before year-end due to growing concerns about the state of the labour market. That may be the case. But it could also mean that the central bank holds off from cutting this month if FOMC members feel they have a lack of clarity, given the missing data releases.

Yesterday’s shutdown took effect after Congress failed to reach a funding deal, with Democrats pushing for extensions of healthcare tax credits and Republicans refusing to bend. The Senate will not return until Friday due to Yom Kippur, delaying progress.

Despite many traders brushing off concerns over the shutdown, there’s a serious risk of the standoff dragging on, with prediction markets currently pointing to a possible two-week duration. President Trump’s threat of furloughed workers having their jobs cut permanently has also added to unease, underscoring concerns around the labour market.

Technically, there’s no reason to see why the current rally in equities can’t push on. The major indices have been pushing higher in a slow but steady grind since April, as markets recovered from their tariff-induced swoon. The daily MACDs across all the majors reflect this move and are far from being overbought. Nevertheless, traders should take care as the markets push up further into this rarified atmosphere. The air is very thin up here, and the risks of a significant pullback increase with every move higher.

Europe rallies

European stock indices were stronger across the board this morning, led by the Euro Stoxx 50 and German DAX. Both indices were up over 1% at the time of writing, with the French CAC not far behind. The indices built on gains made earlier in the week, and the buying propelled the Euro Stoxx to another record high.

The DAX remains within sight of its own all-time highs, while the CAC is still a touch adrift. But it is the Spanish IBEX which has really been on a tear, as it now closes in on its own record high above 16,000 from December 2007, ahead of the Great Financial Crisis. The UK’s FTSE 100 was flat, despite strong results and forward guidance from Tesco, which rallied 3%.

Source: TN Trader

Investors appear to be throwing caution to the wind as they look across the Atlantic to Wall Street. While it’s fair to say that many European corporations trade at attractive multiples when compared to their US counterparts, it’s also the case that neither Europe nor the UK fosters talent and innovation as well as their American cousins.

US dollar rangebound

In the Forex market, the US dollar drifted lower again today, in a move which saw the Dollar Index head back towards support around 97.00. This time last week, the Dollar Index broke above 98.00 to hit its best level in a month. But since then, it has pulled back steadily and is currently on course to post its fifth successive day of losses.

The dollar is currently under pressure thanks to the twin effects of the US government shutdown and some worrying labour market data. This is keeping investors on edge, particularly as the US Federal Reserve is expected to loosen monetary policy into year-end, even as other central banks keep rates unchanged (the European Central Bank) or even raise them (the Bank of Japan).

It’s also well known that the Trump administration favours a weaker dollar, as this should help US exporters. But on the other side of the argument, there are a lot of traders positioned for further dollar weakness. That being so, it wouldn’t take much in the way of dollar-positive news for the greenback to bounce. For now, the Dollar Index looks as if it’s stuck in a range, with resistance at 98.00 and support around 97.00.

Gold and silver mixed

Gold was firmer in early trade this morning, continuing its grind higher. It is trading below the all-time intra-day high hit yesterday of $3,895, but it looks as if most investors aren’t yet ready to cash in their chips and book a profit. Gold has been on an incredible run since it broke above $3,400 in late August. This week’s US government shutdown and continued weakness in the US dollar have given the bulls yet more reason to keep hold of, and add to, their long positions.

Yet, the daily MACD continues to get stretched to the upside. While it isn’t as overbought as it was back in April, when gold hit a record high of $3,500, the MACD is still a bit of a warning to the bulls. This is not to suggest that gold can’t go higher, just that it may need a pullback or period of consolidation first.

Despite this, there’s a growing feeling of FOMO amongst investors, even as the retail market has yet to get involved in a way like previous bull runs.

Source: TN Trader

It’s a similar story for silver, which is, if anything, even more stretched to the upside when simply focusing on its daily MACD. Silver continues to play catch-up with gold as it is still a bit short of its own all-time high of $50 from April 2011.

Source: TN Trader

The US government shutdown, weaker dollar and prospect of lower US interest rates are all supporting the silver price currently. Both gold and silver are displaying a resilience that has surprised many. But traders should ride these rallies with care. And if history is any guide, they should be prepared for some big swings and wild volatility as this bull run extends.

Oil tests key support

Crude oil was weaker again in early trade on Thursday, compounding a dismal week so far. Front-month WTI has lost over 6% since Friday’s close as traders price in the prospect of fresh supply hitting the market. Broadly, this comes in two forms. The first is a result of an oil pipeline running through Turkey, which has been closed since March 2023. Iraq and the Kurdish region agreed to reopen the pipeline, and this should soon allow an extra 200,000 barrels per day for global export.

The other source of supply could come after the OPEC+ meetings this Sunday. The group is expected to announce further unwinding of previous production cuts by allowing a large increase in output from its members. This comes as the US government enters its second day of shutdown, with policymakers unable to agree on a federal budget. This has only added to concerns over the ongoing global demand growth slowdown, once again raising fears that the world could soon be drowning in oil.

Add in a bigger-than-expected rise in US crude inventories, as reported yesterday by the Energy Information Administration, along with speculation that China is stockpiling oil rather than using it, and it’s easy to see why prices are under pressure. This has all helped to dispel fears of a supply squeeze as Ukraine attacks Russia’s energy infrastructure.

However, it’s worth noting that oil is retesting significant support, which comes in around $61.50 for front-month WTI. A prolonged break below here could set up a move back towards $60. But given recent weakness, a rebound off current levels can’t be ruled out.

Source: TN Trader

Gas hits 10-week high

Natural gas prices saw modest losses overnight, marking a change of tone after the strong rally in recent days. While the decline was not sharp, it did suggest a pause in momentum, as the recent upside had already carried the market significantly higher.

The overnight dip showed that buyers may be stepping back temporarily after the run, allowing prices to cool off. Even so, the broader trend from earlier sessions remains in focus, and the pullback was measured rather than decisive.

Crypto rallies

Bitcoin and Ether built on this week’s gains overnight, supported by the broader improvement in risk sentiment. The sector had come under severe downside pressure last week but managed to steady over the weekend.

Since then, both Bitcoin and Ether have made decent gains. The former is back within sight of the significant $120,000 level, while the latter has put some distance between current levels and the key area of support around $4,000. Both markets have seen their respective daily MACDs curl up, suggesting that upside momentum may build from here. 

Volatility steady

The VIX was steady overnight, pulling back from highs made early on Wednesday. Despite the US government shutdown and weaker labour data, the index did not move significantly, suggesting that investors were not rushing to increase protection.

Instead, the consensus view appears to be that this disappointing news only boosts the likelihood that the US Federal Reserve will loosen monetary policy further before year-end.

If so, that should help to underpin the S&P 500, reducing the danger of a downside correction. Investors remain complacent. But it's difficult to see why they wouldn’t be, particularly as they view President Trump as a ‘markets-guy’. 

Market outlook

Weak jobs data provided the excuse for markets to price in more rate cuts, boosting equities to fresh highs. While the government shutdown is disruptive, investors continue to view it as a temporary hindrance rather than a lasting problem. The dollar is testing support, while gold and silver remain on a seemingly unstoppable upward trend despite being stretched.


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