Last week was dominated by uncertainty surrounding the situation in the Middle East, tensions involving Russia and, of course, Nvidia’s outstanding earnings and expectations ahead of Kevin Warsh’s speech at Jackson Hole. That is now in the past, however, and the coming days are likely to bring another dose of volatility given several key macroeconomic releases and other important events. Investors should pay particular attention to next Friday’s U.S. labor market data, Tuesday’s eurozone inflation reading, and interest rate decisions from the central banks of New Zealand and Canada. In this context, instruments such as US500, EURUSD and USDCAD are worth watching closely.

US500

This week has been positive for Wall Street investors, largely thanks to Nvidia’s phenomenal earnings and its very optimistic revenue growth outlook. Next week, the key test for the S&P 500 index and US500 futures will be a series of U.S. economic data releases. On Tuesday, investors will receive the ISM Manufacturing Index and the JOLTS report, followed on Wednesday by the ADP employment report and the Federal Reserve’s Beige Book, while Thursday will bring the ISM Services Index. The main event of the week will be Friday’s Non-Farm Payrolls report.

After the unexpected decline in employment in July, the current market consensus points to an increase of around 60,000 jobs. Historically, sharp downside surprises in NFP data have triggered Wall Street sell-offs on recession fears, while moderate employment growth has supported the “soft landing” scenario and helped equity indices return toward their highs. It is also worth noting that Broadcom and HP will report earnings after the market close on Wednesday.

EURUSD

The world’s most important currency pair is entering a period packed with key economic releases. Next Tuesday, investors will focus on the preliminary eurozone CPI inflation reading as well as PMI data. These figures will shape expectations ahead of the ECB meeting on September 9–10. Markets are almost fully pricing in a rate cut, meaning the inflation reading could be particularly important for the euro’s valuation. The second half of the week will test the strength of the U.S. dollar, with a speech from Fed Governor Christopher Waller on Thursday and, above all, Friday’s NFP report. The euro may also become increasingly sensitive to changes in energy commodity prices, including European TTF natural gas.

USDCAD

Canadian dollar-related instruments could face a double dose of volatility next week. On Wednesday, the Bank of Canada will announce its interest rate decision, followed by a press conference with Governor Tiff Macklem. The most important moment, however, will come on Friday, when labor market reports from both the U.S. and Canada are released at the same time. Historically, simultaneous employment data from the two economies have generated some of the largest monthly volatility moves in USDCAD. If the BoC delivers a dovish message while U.S. NFP exceeds expectations, the pair could see a strong upward impulse. Beyond the data, trade disputes and oil price developments will remain important drivers.