US Government Shutdown Continues

• With US economic data still limited by the ongoing government shutdown, investor focus has shifted to political developments and central bank expectations.
• Overnight, Trump hinted that a meeting with Xi may not happen soon, while maintaining optimism about reaching a trade agreement in the future.
• Treasury yields edged lower as markets continued to price in a softer Fed stance, with a near 95% chance of a 25bp cut at the upcoming 30 October meeting.
• In Australia, bond yields followed the global tone, with 3 year futures trading between 3.34% and 3.36%, and 10 year yields dipping from 4.14% to 4.11%.
• Markets are now pricing around a 70% probability of a 25bp RBA cut at the 4 November meeting, with next week’s Q3 CPI release expected to be the key driver.