By Michael Every of Rabobank

What, no payrolls Friday?

Most in markets will be focusing on the US government shutdown –the first in seven years– that just started. For example, if it isn’t reversed quickly we won’t get the US payrolls report this Friday. The same data series that’s just been wildly revised, again, and which some see as full of methodological holes as a Swiss cheese in capturing the reality of the US economy, might not be there for people to all speculate on at the pre-arranged time. The horror!

Meanwhile, the White House has withdrawn its nominee to lead the BLS Bureau of Labor Statistics and that for chair of the Commodity Futures Trading Commission, so who knows when the data will mean anything again anyway.

To say there is a lot else going apart from “What, no payrolls Friday?” is again a staggering understatement.

If we are talking shutdowns, how about the Taliban shutting down the internet and mobile phone networks in Afghanistan to prevent “vice” – and all flights in and out having been grounded as a result? It may not add a lot to world GDP, but that’s an entire country that just dropped off the 21st century map. But ‘no payrolls’.

In the Middle East, Trump said Hamas has “three or four days” to respond to his 20-point Gaza plan or it will “pay in hell”, as the Qatari PM seemed to backtrack and say the plan still needs “clarification and discussion”, and Turkey’s spy chief arrived in Doha to hold talks with the designated terror group. The BBC has reported Hamas is likely to reject the deal, which regional experts think could presage an explosion of military action before it is then finally agreed the hard way – but nothing there is clear.

In Europe, the EU is to meet to discuss setting up a drone wall, no easy task, if it can be done at all, with Germany and the pro-EU UK Guardian newspaper both noting the EU isn’t set up for these kind of military crises and something needs to change: logically, either more power has to be centralized or delegated back to the member states. Both would imply massive changes in how politics, economies, and markets would operate over time. Or, neither happens and things like drone walls don’t either. Which has its own implications. That’s as Denmark’s PM again warns that Russia’s hybrid war is “only the beginning”, while Bloomberg talks of Europe’s east wrestling with a hybrid war “of drones and migrants.”

The Trump admin notified Congress of a major expansion to an existing arms sale to Estonia, quadrupling its planned long-range ATACMS munitions and doubling HIMARS launchers, which Russia will obviously see as a huge provocation.

In Latin America, Venezuela strengthened its alliance with Russia through the approval of a Strategic Partnership Treaty: the sides are clear and the geographical flashpoints are too.

Moreover, Secretary of Defence/War Hegseth told US generals, in the Wall Street Journal’s words, to do things his way or quit – and lose weight, as Trump told them that the US military could be used to fight the “enemy within”, where some US cities are so dangerous that they could become training grounds for them.

Meanwhile, International Criminal Court staff are reportedly printing files and preparing for a blackout as US sanctions against them loom.

In parallel geoeconomics:

The US vowed it will maintain tariffs even if the Supreme Court rules against it – and it does have other legislative tool available to do so if needed.
The South China Morning Post asked ‘Has Lutnick signalled the end of Taiwan’s ‘Silicon Shield’ against Beijing?’ where the “Trump administration is pressuring Taiwan to shift 50% of chip production to the US or risk losing US protection against China” – a demand which Taiwan has responded to with a ‘No’.
The US government is to take a stake in Lithium Americas to boost its Nevada project, as once again the state steps into critical supply chains.
China halted purchases of Australian BHP’s iron ore after price talks broke down, where some market participants said it reflected both a push for lower prices and a shift to CNY-denominated contracts – a staggeringly important development which I have long flagged would be logically inevitable. What does Australia do in response?
The answer could be Canberra reportedly floating allowing allies, such as the US and UK, to access its critical minerals that will be developed through its own new state-backed fund. That doesn’t help with iron ore unless the US starts making steel again on a vast scale: remind me what US tariffs are supposed to be for again?
Elsewhere, a $1.4bn Tazara rail deal will see China’s state-owned CCECC refurbish and operate the ageing Tanzania-Zambia railway, securing Africa’s copper belt direct access to vital shipping links that then head to China. If I recall correctly, Europe is talking about setting up a committee with an acronym to discuss similar things perhaps happening at some point in the future.

In a different space, yesterday saw the White House unveil ‘TrumpRx’, a drug-buying website alongside a related Pfizer pricing deal, where the company gained a three-year grace period exempting it from national-security-related pharma tariffs, while US consumers can buy cheap drugs via the government. Lowering the cost of key goods so consumers have the purchasing power to buy more expensive made-at-home products in other categories is a statecraft tool as old as the hills. Indeed, the above shows how US economic statecraft covers: Trade (US-centric system with no large US trade deficits); Capital (Money must flow where it ‘needs to’ – i.e., Lithium and rare earths); and Other (Whatever else it takes, wherever it takes it to achieve the other two).

And in the background, gold is close to another record high –and the most overbought in a very long time– while US equities are also at record highs as if none of the above matters at all.

Perhaps the real threat of ‘no payrolls Friday!’ is it leaves Mr Market with too much free time to focus on more worrying issues and questions than ‘Buy all the things!’ and ‘How do I play the higher/lower than game this month?’