- October 4, 2025
- Posted by: Tresmark
- Categories:
The Marble Halls of Power
Beneath the great dome of the US Capitol, marble columns rise like a temple — built to project order and permanence. Under its dome, presidents have been mourned, wars declared, and laws drafted that shaped modern America. From afar, it gleams as a symbol of stability, yet inside it has witnessed fierce battles and anarchy.
Debates over slavery split a nation. Presidents faced impeachment. Budgets stalled, governments ran out of money. The irony is that the US has shut down just as it celebrates 250 years of independence.
Shutdowns Through Time
2018–19 (Trump vs Congress)
35 days — the longest in US history. Air traffic controllers and TSA workers went unpaid, leading to flight delays and public frustration.
2013 (Obama vs Republicans)
The IMF warned Washington was “playing with fire,” yet investors still rushed into Treasuries — the dollar remains both the problem and the refuge.
1995–96 (Clinton vs Gingrich)
Three weeks of darkness for federal agencies. Markets, ironically, rallied — a reminder that Wall Street and Washington often live separate lives.
Rate Cut Teeters
The latest PCE data confirmed what Fed Chair Powell had feared — tariff pressures are nudging inflation higher again. Fed funds futures now price barely a 60% chance of a December rate cut, down sharply from 85% just two weeks ago. With the US shutdown halting jobs and spending releases, traders are flying blind. Yet equities have shrugged it off: the S&P 500 hit new highs, powered by productivity gains and unshaken risk appetite. Gold is on a roll, staying above its uptrend line, while the dollar, after an early surge, limped into the weekend as markets reassessed the situation. In short, liquidity is chasing momentum, not data — because there’s none.
Rupee Outlook
For emerging markets, that vacuum cuts both ways. The lack of US data magnifies volatility; yields and FX swing harder when visibility fades. But PKR has shown steady consolidation over the last few months, even after clearing the $500mn Eurobond repayment and facing consecutive current account deficits. The direction is clear, but where it stops is not. Exporters are more aggressively selling dollars in the forward market — increasingly in longer tenors. Historically, with these levels of forward selling, swaps would have collapsed, but this time SBP is a buyer in the forward market, supporting premiums. SBP has trimmed its swap book to $2bn, about $500mn better than in Jun 25 which is not insignificant in any way
With the IMF expected to approve the next $1bn tranche, we may see portfolio rebalancing and dollars being converted into higher-yielding rupee assets — which could further strengthen PKR.
This also bodes well for KSE100 which is already trading at its life time highs and having witnessed 7 consecutive gains
Projections
USD/PKR
• 1 Week: 281.10
• 1 Month: 280.50
• 1 Quarter: 282.00
EUR/USD
• 1 Week: 1.1703 (Bearish)
• 1 Month: 1.1822 (Bullish)
• 1 Quarter: 1.1923 (Bullish)
GBP/USD
• 1 Week: 1.3427 (Bearish)
• 1 Month: 1.3585 (Bullish)
• 1 Quarter: 1.3679 (Bullish)
USD/JPY
• 1 Week: 147.13 (Sideways)
• 1 Month: 144.99 (Bearish)
• 1 Quarter: 142.41 (Bearish)
Oil WTI
• 1 Week: 61.67 (Bullish)
• 1 Month: 64.8 (Bullish)
• 1 Quarter: 65.4 (Bullish)
Gold
• 1 Week: 3860 (Sideways)
• 1 Month: 3633.75 (Bearish)
• 1 Quarter: 3647.6 (Bearish)
