World

Asian Markets Surge Amidst U.S. Government Shutdown Optimism and Fed Rate Cut Bets

Asian stocks rose on U.S. shutdown optimism. Fed rate cut bets increased; oil prices surged.

November 12, 2025, 9:02 AM

Businessman in a dark suit checks his smartphone while standing in front of a large digital screen displaying global stock market indices.

This photo captures a businessman intently checking his mobile device against a backdrop of a large digital stock board displaying various international indices and market data. By Keisuke_N / Shutterstock.com.

Executive Summary

Asian stock markets saw gains driven by optimism over the potential end of the U.S. federal government shutdown and increased bets on a Federal Reserve interest rate cut.

The U.S. House of Representatives is preparing to vote on legislation to restore funding to government agencies, following the Senate’s passage of a bill to end the record-long shutdown.

Traders increased the implied probability of a 25-basis-point Federal Reserve interest rate cut at the December 10 meeting to 67%, influenced by recent U.S. jobs data.

The Story So Far

The current market optimism is largely driven by growing expectations for an end to the prolonged U.S. federal government shutdown, which began on October 1 and has become the longest in U.S. history. This political development, alongside recent U.S. jobs data indicating private sector job losses, has also led traders to increase bets on an upcoming Federal Reserve interest rate cut. Concurrently, oil prices have seen fluctuations, reaching monthly highs due to U.S. sanctions on Russian oil.

Why This Matters

The growing optimism around the resolution of the prolonged U.S. government shutdown is boosting global market confidence, particularly in Asian equities, while recent U.S. jobs data is fueling increased expectations for a Federal Reserve interest rate cut, signaling a potential shift towards more accommodative monetary policy, even as U.S. sanctions on Russian oil continue to influence commodity prices.

Who Thinks What?

Traders and Asian markets expressed optimism regarding the potential end to the U.S. federal government shutdown and increased bets on an upcoming Federal Reserve interest rate cut following recent U.S. jobs data.

Analysts from Westpac noted that market sentiment improved after the U.S. Senate passed a bill to end the record-long shutdown, with expectations for House approval in the coming days.

Sean Taylor, Chief Investment Officer at Matthews Asia, suggested that the market might be “seeing or past peak momentum” but affirmed that “fundamentals are still good,” citing AI capex spend, U.S. rate cuts, and earnings as indicators of strong underlying growth prospects for 2026.

Asian stock markets saw gains on Wednesday as optimism grew over the potential end to the prolonged U.S. federal government shutdown, which commenced on October 1. Traders also increased bets on an upcoming Federal Reserve interest rate cut following recent U.S. jobs data, while oil prices reached their highest level this month due to U.S. sanctions on Russian oil.

U.S. Government Shutdown Optimism

MSCI’s broadest index of Asia-Pacific shares outside Japan rose 0.4% as members of the U.S. House of Representatives prepared to vote on legislation aimed at restoring funding to government agencies. The shutdown has become the longest in U.S. history, impacting various federal services.

Analysts from Westpac noted that sentiment improved after the U.S. Senate passed a bill to end the record-long shutdown, with expectations for House approval in the coming days. This development provided a significant boost to market confidence.

U.S. Market Performance and Economic Data

S&P 500 e-mini futures were trading 0.2% higher, following a mixed session for U.S. stocks on Tuesday. The Dow Jones Industrial Average rose 1.2% to reach a record close, while the Nasdaq Composite slipped 0.3%.

In the absence of official data from federal government agencies, traders focused on weekly jobs data from ADP. The report indicated that private employers shed an average of 11,250 jobs per week in the four weeks ending October 25.

This jobs data has led traders to increase bets on further easing from the Federal Reserve. According to the CME Group’s FedWatch tool, Fed funds futures are pricing an implied 67% probability of a 25-basis-point cut at the U.S. central bank’s next meeting on December 10, up from 62% a day earlier.

Currency and Commodity Movements

The U.S. dollar index, which measures the greenback’s strength against a basket of six currencies, was last 0.1% higher at 99.574. The dollar strengthened 0.2% against the yen to 154.48, while the euro slipped 0.1% to $1.1575.

Brent crude slid 0.3% to $64.93 per barrel, edging back after reaching its highest level since October 31. The price fluctuations were attributed to the impact of the latest U.S. sanctions on Russian oil and optimism surrounding a potential end to the government shutdown. Gold was last 0.5% lower at $4,105.69, and Bitcoin was up 0.7% at $103,321.77.

Asian Market Specifics and Corporate News

Taiwanese stocks led gains in Asia, rising 1%, while Japan’s Topix index rose 0.6% to hit a fresh record high. However, SoftBank Group bucked the trend with a 6.2% decline, taking its month-to-date loss to 21% after it announced the sale of its entire stake in Nvidia on Tuesday.

Despite the recent fall, shares in Japan’s largest tech sector investor have more than doubled this year. Sean Taylor, Chief Investment Officer at Matthews Asia, commented on the market’s state, suggesting it might be “seeing or past peak momentum.” He added that “fundamentals are still good – AI capex spend, U.S. cutting rates, earnings,” indicating a market torn between short-term positioning and strong underlying growth prospects for 2026.

Market Outlook

Global financial markets on Wednesday reflected a cautious optimism, driven by developments in U.S. political stability and monetary policy expectations. While Asian equities largely posted gains, specific corporate actions and commodity prices demonstrated varied responses to geopolitical events and economic indicators.