Global equity and bond markets are eagerly awaiting the week’s main event – the publication of the U.S. non-farm payrolls (NFP) report for August. Yesterday’s session on Wall Street ended in positive territory following dovish comments from Federal Reserve Board Governor Christopher Waller, who signaled a readiness to hold or cut interest rates if incoming data confirms a further cooling in inflationary pressures and the labor market. Geopolitical tensions in the Middle East and a rebound in crude oil prices continue to weigh on market sentiment and maintain elevated uncertainty. Today’s NFP print will be crucial in verifying this dovish narrative and determining the magnitude of potential Fed rate cuts at the upcoming September meeting.

Key Asian Session Releases

• 01:30 Japan – Household Spending y/y for July was -3.6%. Consensus: -1.6%. Previous: -3.3%. The reading came in weaker than expected, highlighting persistent weakness in private consumption.

Economic Calendar

• 08:00 Germany – Industrial Orders m/m. Consensus: 0.3%. Previous: 3.1%.
• 11:00 Eurozone – Retail Sales m/m. Consensus: 0.3%. Previous: -0.3%.
• 11:00 Eurozone – Retail Sales y/y. Consensus: 1.1%. Previous: 0.7%.
• 14:30 USA – Nonfarm Payrolls. Consensus: 55K. Previous: -23K.
• 14:30 USA – Unemployment Rate. Consensus: 4.1%. Previous: 4.1%.
• 14:30 USA – Average Hourly Earnings y/y. Consensus: 3.0%. Previous: 3.2%.
• 14:30 USA – Labor Force Participation Rate. Consensus: N/A. Previous: 61.4%.
• 14:30 Canada – Employment Change. Consensus: 15.0K. Previous: 8.2K%.
• 14:30 Canada – Unemployment Rate. Consensus: 6.4%. Previous: 6.4%.
• 19:00 USA – Baker Hughes Rig Count. Consensus: N/A. Previous: 447.

3 Markets to Watch Today:

1. EUR/USD (and US Dollar Index – DXY): The primary beneficiary of the NFP report. A reading below consensus would align with Waller’s dovish remarks yesterday, placing downward pressure on the dollar and boosting EUR/USD.
2. Gold: Highly sensitive to fluctuations in U.S. Treasury yields and shifting Fed rate expectations. Confirmation of further labor market cooling will provide support for the precious metal.
3. S&P 500 / US500: Equity markets will gauge whether softer labor market data is interpreted as a signal for prompt rate cuts or if it triggers broader concerns about an economic slowdown.