"No News is Good News" for Now, Fed Commentary Under Watch Without Ecodata

Economic Data and Market Reactions - The government shutdown has delayed key economic data releases, including jobless claims and the non-farm payroll (NFP) report, leading to increased focus on Federal Reserve commentary [1][2][4] - Market participants are anticipating Fed rate cuts, with over a 95% chance perceived for this month, as labor market weakness is expected to push equity markets higher [5][7] - The Challenger job cuts report showed a year-over-year drop of 25.8%, indicating a deceleration in layoffs, with reported job cuts at 54,064, significantly lower than the previous month's 85,975 [14][15] Federal Reserve Commentary - Fed members, including Logan and Goulsby, are expected to provide insights on alternative data sets due to the lack of official reports, with a focus on the ADP report and PMI data [3][11][12] - The ADP report indicated a loss of 63,000 jobs in the Midwest, reflecting a potential disconnect with the upcoming BLS data due to adjustments [9][16] - The Fed is likely to discuss the implications of the current labor market trends and their impact on inflation and economic outlook [10][11] Commodity Market Insights - Oil demand remains weak globally, with prices influenced by supply-side factors such as disruptions in Russian oil exports and refinery outages in the U.S. [21][22] - China's recent behavior of importing crude oil for storage rather than consumption suggests a weakening demand picture in the near term [22] - Seasonal trends typically lead to pricing weakness in oil and petroleum products during winter, but geopolitical risks, particularly related to Ukraine, could create upward pressure on prices [23][24]