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[Quick Facts]

1. The U.S. government's shutdown threat eases, but no parties come up with a real solution.

2. McCarthy may be ousted after the stopgap measure is successfully passed.

3. Putin issued a decree declaring September 30 as "Unification Day".

4. BoJ Governor: There is still a long way to go before exiting the easing policy.

5. Oil prices are expected to hit their biggest quarterly rise since the Russia-Ukraine conflict amid tight supply.

6. Bank of Canada may pause rate hikes as its economic growth is lower than expected.

[News Details]

The U.S. government's shutdown threat eases, but no parties come up with a real solution

On the evening of September 30, U.S. President Joe Biden signed a temporary funding bill just less than an hour left before the federal government's funds for the 2023 fiscal year were exhausted, which temporarily eased the U.S. government's shutdown threat. The bill, which would allow the U.S. government to operate until November 17, includes $16 billion in disaster relief funding but does not include aid to Ukraine. Lawmakers from both parties who support funding to Ukraine say it will be handled separately. (The House passed the bill earlier Saturday)

But this stopgap measure only postpones the problem without actually solving it. The ongoing shutdown threat of the government has aroused concern about the government's fiscal deficit, governance failure, and debt issues. Some American commentators said that in the face of the debt crisis and fiscal appropriation, bipartisan didn't come up with a real solution, but instead continues to aggravate the debt problem.

McCarthy may be ousted after the stopgap measure successfully passed

House Speaker McCarthy backed a bipartisan deal to avert a government shutdown, sparking dissatisfaction among far-right Republicans, who called for removing him from office. Gaetz, a Florida Republican, said on Sunday he would file a motion to oust the speaker this week, although the procedure has not resulted in a vote to remove the speaker since 1910.

"I do intend to file a motion this week to try to remove House Speaker McCarthy from the leadership." Gaetz said. "I think we need to rip off the Band-Aid. I think we need new leadership that can be trustworthy," Gaetz said. His move stems from McCarthy's acceptance of a bipartisan agreement that does not implement the deep spending cuts demanded by conservatives. He said it was one of the promises McCarthy made when he was elected speaker but these failed to fulfill.

Putin issued a decree declaring September 30 as "Unification Day"

According to the "Kyiv Independent", Russian President Putin signed a decree declaring September 30 as "Unification Day" to commemorate the annexation of Luhansk, Donetsk, and Kherson regions into Russia. Putin said in a video, "One year ago, a decisive, historic, life-changing event occurred when the agreement for the integration of four new regions into the Russian Federation was signed on September 30." The Russian Defense Ministry announced that it would begin recruiting residents of these areas into the army as part of its biannual conscription campaign.

BoJ Governor: There is still a long way to go before exiting the easing policy

On September 30, Bank of Japan Governor Ueda Kazuo said at an academic conference that there is still a long way to go before changing its current monetary policy. Japan has not yet achieved a sustainable and stable price target of 2%. Temporary losses do not hamper the central bank's ability to conduct monetary policy. In the long term, central banks are usually structured to generate profits and provide their means of payment and settlement. However, this does not mean that the central bank can withstand unlimited losses and negative equity. If the financial risks become a problem and cause unnecessary confusion about policies, it could lead to credibility damage. Based on this view, BoJ believes that it is appropriate to continue to implement appropriate policies while focusing on financial soundness.

Oil prices are expected to hit their biggest quarterly rise since the Russia-Ukraine conflict amid tight supply

Earlier industry data on September 29th showed that Russia plans to export a little diesel next month. This move has caused European diesel futures prices to rebound above the key mark of $1000 per ton. Due to the Saudi-led OPEC+ supply cuts and extremely low inventories at Cushing in the United States, U.S. oil futures are set to hit their largest quarterly gain since the period ended in March 2022.

However, WTI crude oil reversed its earlier gains on Friday, which may be mainly affected by fluctuations in U.S. stock markets. Although traders are cautious about the demand outlook, there are few obstacles to crude's move towards $100 as OPEC+ expects a crude supply exposure of 3 million barrels per day in the next quarter. Analysts at Deutsche Bank, including Barbara Lambrecht, said oil for short-term delivery trading at a high premium, indicating tight supply. Meanwhile, oil demand continues to grow. This has aroused tensions in the crude oil market, which is shown by the decline in inventories.

Bank of Canada may pause rate hikes as its economic growth is lower than expected

Canada's economy rebounded slightly last month, but growth remains weak, providing support for the central bank to remain on hold while inflation remains elevated. Preliminary data from Statistics Canada on Friday showed GDP edged up 0.1% in August, with declines in the retail and oil and gas sectors partially offset by gains in the wholesale and financial sectors, while July's GDP figure was flat.

If output is flat in September, the economy is likely to grow at an annualized rate of 0.2% in the third quarter, which is lower than the expected 0.4%. Bank of Canada Governor Macklem and other officials hope that the weakness in consumer activity will translate into slower price increases in the coming months. They adopted a wait-and-see approach at the early September meeting, saying excess demand in the economy was easing. The data supports this view.

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