The dollar index fell to around 98 on Monday, extending losses for a second session as the prospect of a US government shutdown weighed on sentiment and investors awaited key economic data this week. Parts of the government would close on Wednesday if Congress fails to pass a funding bill before the fiscal year ends on Tuesday, though President Donald Trump is set to meet congressional leaders later today to avert a shutdown. Traders also looked ahead to September¡¯s nonfarm payrolls report for labor market cues, alongside job openings, private payrolls and the ISM manufacturing PMI. Stronger US data last week dampened expectations for deeper Fed cuts, with markets now pricing in roughly 40 basis points of easing by year-end. The greenback weakened broadly, posting the sharpest losses against the euro, sterling and yen.

Gold prices climbed to a record high above $3,790 per ounce on Monday, driven by growing expectations of further US rate cuts and a weaker dollar. Data showed on Friday the US PCE inflation data came in line with expectations, reinforcing bets that the Federal Reserve could continue easing policy later this year. Markets are currently pricing in a 90% chance of a rate cut in October and about a 65% probability of an additional move in December. At the same time, investors are monitoring the risk of a potential US government shutdown, which could delay the release of key labor market data and complicate the Fed¡¯s decision-making process. On the trade front, President Donald Trump last week announced a new round of tariffs targeting imported drugs, trucks, and furniture, set to take effect on October 1, adding further uncertainty to the economic outlook.

WTI crude oil futures fell to $65.1 per barrel on Monday after Iraq's Kurdistan region resumed crude oil exports over the weekend after a two-and-a-half-year halt, adding supply to a market already bracing for a surplus. The agreement between Iraq's federal government, the Kurdistan Regional Government, and international oil companies operating in the region, will initially allow between 180,000 and 190,000 bpd to flow to Turkey's Ceyhan port. This comes after US pressure to bring Kurdish crude back to international markets, with volumes eventually expected to rise to around 230,000 bpd. The return of Kurdish oil coincides with OPEC+ efforts to boost output to gain market share. Reports indicated the group will likely approve another output hike of at least 137,000 bpd at its meeting later this week. Last week, WTI rose more than 5%, its biggest weekly gain since June, as Ukraine's continued strikes on Russian energy infrastructure cut the country's fuel exports.

Profits at China¡¯s industrial firms grew 0.9% yoy to CNY 4.69 trillion in the 1st eight months of 2025, rebounding from a 1.7% decline in the 1st seven months of the year. The latest figures come amid further stimulus measures from Beijing and easing trade tensions with the US. The increase was supported by faster growth in the private sector (3.8% vs 1.8% in Jan¨CJuly), while state-owned enterprises recorded a much smaller decline (-1.7% vs -7.5%). By sector, profits rose in general manufacturing (5.8%), non-ferrous metals (12.7%), heat production (13.0%), electrical machinery and equipment (11.5%), computers and communications (7.2%), agriculture (11.8%), and special equipment (6.9%). In contrast, declines were seen in autos (-0.3%), non-metallic minerals (-2.2%), chemicals (-5.5%), textiles (-7.0%), oil and gas (-12.4%), and coal mining (-53.6%). In August alone, profits surged 20.4% yoy, recovering sharply from a 1.5% drop in July, and marking the 1st monthly growth in four months.

The US PCE price index went up 0.3% month-over-month in August 2025, after a 0.2% gain in July, in line with market expectations. Prices for goods rose 0.1%, rebounding from a 0.1% fall in the previous month and services cost rose 0.3%, the same as in July. Core PCE, which excludes food and energy, increased 0.2%, the same as a downwardly revised 0.2% in July and also in line with forecasts. Separately, prices for food increased 0.5%, after a 0.1% drop in the previous month and cost for energy goods and services also rebounded (0.8% vs -1.1%). On an annual basis, headline PCE inflation accelerated to 2.7%¡ªthe highest in six months¡ªfrom 2.6% in both July and June. Meanwhile, core PCE inflation held steady at 2.9%. Both annual figures came in line with expectations.

A busy week of major economic releases will be headlined by the US employment report, featuring fresh data for payrolls, unemployment, and wage growth that will impact the policy path for the Fed this year. Other major labor market updates include the ADP employment report, results from the JOLTS, and Challenger job cuts. Besides labor updates, investors will also be alert on the risk of a US government shutdown amid the start of the new fiscal year. In Europe, fresh inflation data for the Eurozone and its members are due, in addition to CPI publications by Turkey and Switzerland. Key leading indicators are also expected stateside in ISM PMIs, coinciding with PMI releases in China, Italy, Canada, Brazil, Mexico, South Korea, and ASEAN states. On the monetary policy front, rate decisions are due in Australia and India