Forecasting the Coming Week: The US labour market steals the show

The Greenback finally managed to regain some composure, strongly bouncing off 13-month lows on the back of renewed downward bias in the risk-linked space, while positive results from the US docket also underpinned the weekly recovery.

The US Dollar Index (DXY) dropped, and rebounded, from levels last seen in the summer in 2023 near 100.50, as investors continued to assess the prospects of lower rates in September amidst a firm economy. The final S&P Global Manufacturing PMI is due on September 3, along with Construction Spending, the RCM/TIPP Economic Optimism Index, and the always-relevant ISM Manufacturing PMI. The weekly Mortgage Applications tracked by MBA comes first on September 4, seconded by Balance of Trade results, JOLTs Job Openings, Factory Orders, the EIA’s report on US crude oil inventories, and the Fed’s Beige Book. The usual weekly Initial Jobless Claims, the ADP Employment Change, the final S&P Global Services PMI, and the ISM Services PMI are all due on September 5. Finally, the crucial Nonfarm Payrolls, and the Unemployment Rate will be unveiled on September 6.

EUR/USD extended its rejection from 2024 peaks around the 1.1200 region, revisiting the 1.1040 zone amidst a multi-day pullback towards the end of the week. HCOB will release the final Manufacturing PMI for Germany and the euro zone on September 2, and will then publish the final Services PMI on September 4, followed by Producer Prices in the euro area. Factory Orders in Germany will be published on September 5, along with the HCOB Construction PMI in Germany and the broader euro zone, and Retail Sales in the EMU. On September 6, Germany’s Balance of Trade results are due, seconded by EMU’s third estimate of the Q2 GDP Growth Rate.

GBP/USD could not sustain the move to fresh tops north of the 1.3200 hurdle and succumbed to the weekly U-turn in the Greenback. The final S&P Global Manufacturing PMI comes on September 2, followed by the BRC Retail Sales Monitor on September 3. The final S&P Global Services PMI is due on September 4, along with New Car Sales, and the S&P Global Construction PMI. The release of the Halifax House Price Index will close the UK docket on September 6.

USD/JPY ended the week with decent gains in combination with rising US yields and further improvement in the US Dollar. Capital Spending figures and the final Jibun Bank Manufacturing PMI will be unveiled on September 2. The final Jibun Bank Services PMI is expected on September 4, while Average Cash Earnings and Foreign Bond Investment figures are due on September 5. On September 6, Household Spending, and the advanced Coincident Index and Leading Economic Index are next on tap on September 6.

Quite a volatile week saw AUD/USD finally surpassing the 0.6800 barrier, although the move dissipated somehow later. On September 2, the final Judo Bank Manufacturing PMI comes first ahead of preliminary Building Permits, and Commodity prices. Quarterly Current Account results are due on September 3, ahead of the Ai Group Industry Index, the final Judo Bank Services PMI, and Q2 GDP Growth Rate, all expected on September 4. The Balance of Trade data will come on September 5. Home Loans and Investment Lending for Homes will be released on September 6.

Anticipating Economic Perspectives: Voices on the Horizon

• The ECB’s Nagel is due to speak on September 3.
• The RBA’s Bullock speaks on September 5.
• The Fed’s Williams speaks on September 6.

Central Banks: Upcoming Meetings to Shape Monetary Policies

• The BoC, and the NBP will meet on September 4.
• The BNM will decide on rates on September 5