In the week ahead: Core US CPI and PPI, US Retail Sales

The EUR/USD pair traded lower early on Monday as the U.S. Dollar (USD) gained momentum on reports that the prolonged U.S. government shutdown may soon come to an end.

According to Bloomberg, a group of centrist Senate Democrats have agreed to back a deal that would reopen the government and provide funding for key departments through the next fiscal year. The agreement is expected to ensure that federal employees receive back pay and that delayed federal transfers to states resume. Some departments would be funded through January 30, while others would receive full-year allocations.

The greenback initially softened late last week after the University of Michigan’s Consumer Sentiment Index fell to 50.3 in November — the lowest level since June 2022 — amid growing concerns over the shutdown’s economic toll.

Despite the recent weakness in the Euro, the EUR/USD pair could find support from diverging monetary policy outlooks between the European Central Bank (ECB) and the U.S. Federal Reserve (Fed).

ECB policymakers have maintained a balanced tone in recent comments. Francois Villeroy de Galhau stressed the importance of keeping policy options open, while Joachim Nagel urged continued vigilance on inflation. Meanwhile, Vice President Luis de Guindos suggested that any drop in inflation below the 2% target would likely be temporary.

Bitcoin extended its rebound on Monday, tracking gains across risk-sensitive assets as U.S. lawmakers made progress toward resolving the country’s prolonged government shutdown.

The world’s largest cryptocurrency rose is trading 1.56% higher on iForex platform at 06:30 GMT, building on weekend momentum following steep losses through October and early November.

Bitcoin had entered a bear market last week after tumbling more than 20% from its all-time high reached in early October.

Monday’s rise reflected a broader recovery in risk appetite, aided by easing concerns over U.S.–China trade relations following a late-October trade agreement between the two nations.

Market sentiment improved further after the U.S. Senate voted to advance a bill to fund the government until January 30, 2026, signaling progress toward ending the longest shutdown in American history.

An end to the shutdown is expected to restore confidence in the world’s largest economy by enabling the government to resume publishing key economic data. Economists estimate that the standoff has already cost the U.S. tens of billions of dollars in lost output over the past month.

Broader crypto markets mirrored Bitcoin’s gains, recovering some of the heavy losses incurred in recent weeks.

Oil prices edged higher in Asian trading on Monday, supported by growing optimism that a resolution to the prolonged U.S. government shutdown could revive fuel demand in the world’s largest oil consumer.

Crude prices also benefited from bargain buying after last week’s roughly 2% decline, when traders fretted over a potential supply glut and signs of weakening global demand.

Positive inflation data from China, the world’s top oil importer, further bolstered sentiment, signaling potential resilience in energy demand from the region.

Market confidence improved after multiple media reports indicated that a group of Democratic senators had agreed to back a Republican spending bill to fund the U.S. government until January 30, 2026.

Traders are also turning their attention to key industry updates from the Organization of the Petroleum Exporting Countries (OPEC) and the International Energy Agency (IEA), both scheduled for release later this week.

The OPEC monthly report is due Wednesday, followed by the IEA’s report on Thursday. The two agencies have often presented divergent views on global oil demand and supply dynamics, and investors will closely parse both reports for fresh insights into the market outlook.

OPEC remains a focal point for traders after the producer group increased output by nearly 3 million barrels per day in 2025, fueling fears of oversupply amid sluggish global economic growth. These concerns, coupled with a softer demand outlook, have pressured oil prices in recent months.

The US 500 finished the week slightly lower on Friday, trimming losses late in the session after renewed optimism that the U.S. government shutdown could soon come to an end. Hopes were lifted after Senate Minority Leader Chuck Schumer proposed a deal aimed at reopening the government.

The University of Michigan’s Consumer Sentiment Index fell to 50.3 in November from 53.6 in October, the lowest reading since June 2022, missing economists’ expectations of 53.0.

Recent labor market data has also reflected growing uncertainty. Challenger, Gray & Christmas reported a 183% surge in layoffs in October — the sharpest monthly jump in decades. Data from the Bank of America Institute indicated a noticeable cooling in employment activity since the spring, even as ADP reported a modest rebound with 42,000 new private-sector jobs added last month. The Fed cut rates by 25 basis points in October to support a softening job market, though Chair Jerome Powell cautioned that another reduction this year is not guaranteed.

Affirm Holdings surged after posting strong fiscal Q1 2026 results and raising full-year guidance, signaling continued momentum in the buy-now-pay-later space. Peloton Interactive gained after beating quarterly revenue estimates, supported by solid demand for its revamped product lineup and price increases across hardware and subscriptions. Airbnb erased gains even after forecasting upbeat quarterly revenue, driven by strong bookings in Latin America and Asia-Pacific.

In other news, Tesla shareholders approved a historic compensation package for CEO Elon Musk, potentially worth up to $1 trillion over the next decade.