Insights 
VT 
Markets remain calm as the September US labor report is delayed due to the government shutdown. The focus remains on the resilience of the labor market and inflation trends, which will guide the Federal Reserve’s future actions.
Tonight’s FOMC minutes may provide insight into recent internal debates but are unlikely to impact the dollar. Some members express caution about further rate cuts, considering recent economic factors, while others maintain a dovish stance.
Differences Within The FOMC
The differences in opinion within the FOMC are expected, and statements show views can shift with changing economic conditions. However, without new labor data, the focus remains on future developments rather than past FOMC discussions. Due to delayed data collection and potential impacts on labor reports, these factors are crucial for the dollar’s future rather than the upcoming FOMC minutes. Until new information is available, reacting to past minutes may not provide a clear direction.
With the government shutdown delaying key labor data, we are seeing markets in a holding pattern. Short-term volatility is likely to remain suppressed, creating a challenging environment for directional plays. For example, implied volatility on front-month EUR/USD options has fallen below 6.0%, reflecting the market’s decision to wait for a real catalyst before making a significant move.
Treat FOMC Minutes As Old News
It is wise to treat tonight’s FOMC minutes as old news that is unlikely to shift the US dollar. We already know the committee has differing opinions, and the minutes will only confirm what past statements from members like Goolsbee and Miran have already shown. The market’s future direction depends on new data, not a review of a meeting held weeks ago.
The real focus remains squarely on the resilience of the labor market and its impact on inflation. We are waiting to see if the strong job creation we saw in the second quarter of 2025, which averaged around 190,000 new jobs per month, has continued. This delayed report is the single most important piece of information for pricing the Fed’s future path.
This situation is reminiscent of the government shutdown we experienced back in 2013. During that period, the dollar traded in a tight range until the delayed non-farm payrolls data was finally published, which then triggered a sharp and decisive breakout. We should expect that a similar period of pent-up pressure is building right now.
Given this data void, the current calm could be an opportunity to position for the eventual release of information. It may be prudent to consider strategies that benefit from a sharp increase in volatility once the jobs numbers are finally released in the coming weeks. The potential for distorted figures from the shutdown only adds to the uncertainty and the likelihood of a significant market reaction.
