Insights 
VT 
The Business NZ Performance of Manufacturing Index (PMI) remained at 49.9 in September, showing no change from the previous month. This indicates a consistent state, with the PMI below the neutral 50.0 mark, suggesting a contraction in the manufacturing sector.
The US Dollar saw gains, causing the GBP/USD to drop to 1.3300 due to risk-off sentiment intensifying amid the ongoing US government shutdown. The EUR/USD also fell to nine-week lows near 1.1540, attributed to the strengthened Greenback.
Gold Approaches 4000
Gold approached the $4,000 mark amidst a cautious market sentiment, driven by ongoing concerns about the US government shutdown and potential Federal Reserve rate cuts. Despite these market movements, a strong rally in the US Dollar could challenge gold’s continued rise.
Ethereum faced a 4% dip, pulling back towards $4,300 after medium-scale holders massively distributed their holdings, reducing their balance by 1.22 million ETH. Zcash, however, continued its rally, driven by increased interest in privacy protocols, with an eye on breaking above $200.
US tariffs continue to play a significant role in foreign policy and public finance, with recent affirmations of their importance as policy tools.
The New Zealand Business NZ PMI figure of 49.9 indicates the economy is flatlining, sitting right on the edge of contraction. We have seen this before in periods like the 2023 slowdown, where such stagnation preceded further economic weakness. Given the strong US dollar, traders should consider using derivatives to bet against the Kiwi dollar, as it has little domestic strength to fight the trend.
Flight to Safety Evident
A flight to safety is clearly underway due to the US government shutdown, pushing the US dollar higher against most currencies. The sharp drops in GBP/USD to 1.3300 and EUR/USD to 1.1540 are evidence of this broad risk-off sentiment. This pattern is similar to the market reaction during the prolonged shutdown of 2018-2019, which saw the Dollar Index (DXY) climb steadily over several weeks.
Gold is acting as the primary safe haven, pushing towards the $4,000 level as uncertainty grows. The market is pricing in potential Federal Reserve rate cuts to shield the economy, which makes holding non-yielding gold more attractive. With the latest US inflation figures from September 2025 showing core CPI still above the Fed’s 2% target, real interest rates are negative, providing a strong tailwind for bullion.
WTI crude oil falling below $61.50 signals that fears of an economic recession are overriding concerns about supply. This suggests traders believe the shutdown will hurt demand for energy more than any geopolitical event will disrupt its flow. Recent EIA data showing a surprise build in US crude inventories further supports this bearish outlook on demand.
In the crypto space, we are seeing a clear divergence as traders become more selective. While Ethereum is falling, the rally in privacy-focused assets like Zcash suggests a specific demand for protocols that offer anonymity during times of government instability. This indicates capital is not leaving the sector entirely but is rotating into assets with a specific narrative that fits the current macro environment.
