Cautious Optimism Returns as Shutdown Nears Resolution

Macro

US equities opened the week higher as signs emerged of a potential resolution to the prolonged government shutdown. Late on Sunday, the US Senate advanced a bipartisan agreement aimed at reopening the federal government and securing funding through the end of January. The proposal, which received a 60–40 procedural vote, includes provisions to reverse recent lay-offs, ensure back pay for furloughed workers, and address contentious healthcare tax credits in a separate vote expected before mid-December. The measure must still pass both chambers of Congress and be signed by President Trump before taking effect. Markets welcomed the development, viewing it as a step toward restoring policy clarity after weeks of legislative deadlock. The dollar index edged slightly lower to around 99.6, while the 10-year Treasury yield softened to 4.1%, holding near last Friday’s close.

If the deal passes, it should help stabilise short-term sentiment, particularly in rate-sensitive assets that have been trading without reliable macro data during the shutdown. However, with another funding deadline already set for January, the relief may prove temporary. Investors are likely to shift focus quickly back to the Fed’s communication and incoming inflation readings once normal data releases resume, as these will determine whether the recent risk rebound can extend into year-end.

Base Metals

A moderate risk sentiment emerged today, with plans to end the government shutdown providing a modest boost to base metals at the start of the week. Markets continue to struggle for clear direction, resulting in price action that is largely driven either by dollar moves or shifts across the broader asset classes, mostly emerging from the US. Indeed, the today's LME upside is being led by COMEX copper – a key gauge for speculative positioning and near-term sentiment. For the week ahead, we expect metals to drift within current ranges.

In the meantime, zinc spreads remain fundamentally tight, with cash to 3-month at $150/t, supporting forward pricing above the $3,000/t level, trading at $3,073/t at the time of writing. Lead jumped higher on the open, extending Friday’s move after the recommendation to add the metal to the Critical Materials list. If implemented, we expect the tangible impact on lead imports to be limited, given that the majority of existing imports into the US are from “friendly trades”. More likely, any change would focus on ensuring funding and policy support to reduce dependence, rather than implementing defensive tools like tariffs. We believe lead trading above $2,040/t is unsustainable and hold a more bearish bias in the near term.

Aluminium and copper held their nerve at $2,863/t and $10,766/t, respectively. Nickel attempted to breach the $15,100/t level once again but struggled to hold above it, remaining at $15,075/t at the time of writing.

Precious Metals and Oil

Gold and silver rebounded sharply on Monday, buoyed by renewed investor inflows and positive developments in the physical markets. Gold tested resistance near $4,090/oz, while silver jumped back above $50/oz, its highest level since early October. Part of the move followed weekend news that the Shanghai Gold Exchange will suspend certain trading fees to encourage Hong Kong contract activity, alongside silver’s formal addition to the US Critical Minerals List. ETF inflows have also accelerated, hinting that investors are regaining conviction after the recent consolidation phase. The rebound appears more measured than the previous speculative surge, suggesting a stabilising base for further gains. In the forwards, silver’s Tom-Next spread has returned to contango, though mild tightness persists further along the curve, indicating cautious restraint from banks after last month’s physical squeeze.

Oil prices traded steady, with WTI around $60/bbl and Brent near $64/bbl.

All price data is from 10.11.2025 as of 17:30