Global Risk Sentiment Frays on US Shutdown Brinkmanship and Mideast Naval Buildup

WASHINGTON/TEHRAN – Global risk appetite is facing a dual assault from Capitol Hill and the Persian Gulf, as the US government inches toward a partial shutdown and military tensions with Iran reach a boiling point.

Washington's ICE Standoff

A funding deadline expires this Friday, threatening to shutter key federal agencies including the Department of Defense and the Department of Labor. The impasse centers on Democratic demands to legislate restrictions on Immigration and Customs Enforcement (ICE) following fatal shootings by federal agents in Minneapolis.

While the White House has offered administrative changes, Democratic leaders including Chuck Schumer are demanding legislative guardrails on enforcement. Polymarket prediction markets are currently pricing in a near 79% chance of a shutdown occurring by January 31, weighing heavily on US equity futures and the dollar.

Carrier Strike Group Deploys

Simultaneously, geopolitical risk premiums are rising in the energy markets. US officials confirmed that the USS Abraham Lincoln Carrier Strike Group has entered the Central Command area of responsibility in the Indian Ocean. This deployment places US naval air power within striking distance of Iran amid reports that Supreme Leader Ayatollah Khamenei has moved to a secure bunker.

Trump has issued stark warnings, stating that any Iranian aggression would result in the nation being wiped off the face of the earth. The military buildup, reminiscent of the pre-conflict patterns seen in mid-2025, has supported crude oil prices, with Brent and WTI both rallying approximately 3%.

Geopolitical Impact on FX

• Safe Havens: The Swiss Franc (CHF) and Gold remain the primary beneficiaries of the fear trade.
• Crude Oil: WTI has reclaimed the $62.00 handle, with further upside expected if the Strait of Hormuz is threatened.