(Reuters) -The U.S. government has shut down, but that hasn't prevented stocks from hitting more record highs, fully confident that bullish rate cuts will keep momentum going. The one hitch is a complete lack of visibility when it comes to what is actually happening in the economy right now. Here's your weekahead from Alden Bentley in New York, Rocky Swift in Tokyo and Alun John, Dhara Ranasinghe and Amanda Cooper in London. 1/ DOLLAR BEARS SHARPEN THEIR CLAWS The dollar starts this final quarter of 2025 in fairly decent shape. Having fallen in the first two quarters, as U.S. exceptionalism came under fire, the greenback ended Q3 with a 1% gain against major rivals. It's still down 10% so far this year, although its stabilisation has bought some calm to the almost $10 trillion-a-day FX markets. On the plus side, immediate threats to Federal Reserve independence – a potential source of dollar stress – have abated for now. On the negative, labour market weakness adds to Fed rate-cuts bets. Dollar bears may not hibernate for long – especially if a U.S. government shutdown is lengthy. The yen, in particular, looks favourable – say FX experts – while the euro could still hit that $1.20 milestone it came so close to last month. 2/ WHO NEEDS DATA? Next week's U.S. data calendar is light, so further market disruption from the government shutdown should be minimal and the U.S. Treasury will hold a normal auction of notes and bonds. The market will likely make do without Tuesday's U.S. International Trade report, and Friday's private University of Michigan preliminary October sentiment index. The Treasury sells $58 billion in three-year notes on Tuesday, $39 billion of the 10-year note Wednesday and $22 billion in 30-year bonds on Thursday. The bond market can't yet compute possible fiscal implications of an indefinite furloughing of federal workers. But with the benchmark 10-year yield above 4%, demand could remain solid. An early taste of third-quarter results comes with Delta Airlines and Levi Strauss among others on Thursday, before the earnings parade kicks off with Wall Street's biggest banks the following week. 3/ SHOT IN THE ARM Battered global pharmaceutical stocks have got a boost from the deal between Pfizer and the U.S. to lower prescription drug prices in the Medicaid programme in exchange for tariff relief. U.S. President Donald Trump had taken aim at the sector over high U.S. medicine prices, sending drugmaker shares to multi-decade lows. But investors now bet the more benign agreement will open the door for more deals. U.S. healthcare stocks are up 5.6% this week, set for their biggest weekly gain in over three years, while European peers are up 7.6%, on track for their best week since 2008. Now it's time to wait to see if these deals materialise and justify that optimism. The U.S. has also slapped tariffs on imported timber as well as kitchen cabinets and furniture, while Trump said he would impose a 100% tariff on all films produced overseas that are then sent into the U.S. 4/ BARRELLING ON Oil is struggling under the weight of hefty global supplies that only seem to be getting bigger, while demand cannot seem to keep pace. The International Energy Agency says there could be an implied surplus of over 3 million barrels per day in 2026, compared with an expected excess of 600,000 bpd this year. The OPEC+ group, which includes OPEC and other exporters including Russia, meets at the weekend and is expected to accelerate the pace at which it is unwinding the curbs on output that imposed during the pandemic. At around $65 a barrel, crude is worth roughly half what it was when Russia invaded Ukraine in 2022. The wildcard for forecasters, producers and consumers alike will remain, as always, geopolitics. 5/ DIRECTION DOWN UNDER The Reserve Bank of New Zealand will almost certainly cut rates next week. The question is: by how much? The RBNZ cut rates to a three-year low of 3% in August. Data last month showed New Zealand's economy contracted 0.9% in the second quarter, due to tariff uncertainty and a weak housing market. Money markets have fully priced in a quarter-point cut to 2.75% when the RBNZ meets on October 8, but the chances of a half-point reduction have grown to 44.5% from about 25% a week ago. Policy divergence between the RBNZ and the Reserve Bank of Australia, which kept rates unchanged in September, could spell further weakness in the kiwi, which is already at a three-year low against its Antipodean counterpart. (Compiled by Amanda Cooper; Graphics by Vineet Sachdev; Editing by Toby Chopra)
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