The US labour market returns to centre stage next week as investors assess whether August's disappointing jobs report was a temporary setback or the start of a broader slowdown.
Friday's Non-Farm Payrolls report will be the week's key event. Economists expect the US economy to add around 12,000 jobs after a surprise decline of 23,000 in August, while the unemployment rate is forecast to edge up to 4.2%. Another weak employment report could strengthen expectations that the Federal Reserve may begin easing monetary policy sooner than expected, putting fresh pressure on the US dollar.
Ahead of Payrolls, investors will also digest the ISM manufacturing and services PMIs together with the JOLTS job openings report. These releases should provide valuable insight into business activity and labour demand, helping markets assess the underlying strength of the US economy.
Our focus this week will be on Alpari's USDInd, which may be preparing for a larger move as markets reassess the outlook for US interest rates.
US labour market back in focus
Markets will closely monitor a series of key US economic releases next week, culminating in Friday's Non-Farm Payrolls report. Investors will also watch inflation data from the Eurozone and the Bank of Canada's interest rate decision for fresh clues on the global policy outlook.
Monday, August 31st: Germany CPI
Germany's preliminary inflation report could shape expectations ahead of the Eurozone-wide CPI release and influence the euro.
Tuesday, September 1st: Eurozone CPI
The latest inflation figures may provide fresh guidance on the European Central Bank's policy outlook and drive volatility in the euro.
Tuesday, September 1st: US ISM Manufacturing PMI and JOLTS Job Openings
Manufacturing activity and labour demand data will offer an early assessment of the US economy ahead of Friday's employment report.
Wednesday, September 2nd: Bank of Canada Rate Decision
The Bank of Canada is expected to leave interest rates unchanged. Investors will closely monitor policymakers' guidance on inflation and future policy moves.
Thursday, September 3rd: US ISM Services PMI
The services PMI will provide an update on the largest sector of the US economy and may influence expectations ahead of Payrolls.
Friday, September 4th: US Non-Farm Payrolls and Unemployment Rate
The week's headline event. Investors will assess whether the US labour market is regaining momentum after August's unexpected decline in payrolls. The results could have a significant impact on expectations for future Federal Reserve policy and the direction of the US dollar.
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