Investors are gearing up for a crucial week ahead, filled with significant economic events that could provide insights into the future of the US economy. The upcoming US jobs report and Federal Reserve Chair Jerome Powell’s remarks will be closely observed to gauge the potential size of the next interest rate cut. The Labor Department’s October nonfarm payrolls report, set to be released on Friday, is expected to reveal the addition of 144,000 jobs to the US economy. This data is pivotal in assessing the likelihood of a “soft-landing” scenario, where the Fed effectively manages inflation without impeding economic growth.
Powell’s Economic Outlook Speech
In addition to the jobs report, Powell’s speech on Monday’s economic outlook before the National Association for Business Economics is highly anticipated. Analysts expect his comments to align with previous statements, in which he justified the 50-basis point rate cut due to confidence in inflation control and shifting downside risks, particularly in the labour market.
Key Economic Events: JOLTS Report, ADP Data, and Eurozone Inflation
Other key events to watch include the JOLTS Report on Tuesday, which will provide insights into August’s labour market conditions, and Wednesday’s release of the ADP Data, which will offer further indicators of the private sector’s hiring trends. The flash September inflation data from the Eurozone, scheduled for release on Tuesday, will also influence the European Central Bank’s rate cut decisions. Additionally, investors will monitor oil prices amid expectations of higher global supply and China’s stimulus measures.
Market Volatility in the Fourth Quarter
The fourth quarter is commencing against market turbulence, marked by August’s volatility followed by record-high stock rallies. Notably, the yen is poised for its best quarterly performance since 2008, and global borrowing costs and oil prices have seen a 15% drop. China’s stimulus initiatives are aimed at boosting economic growth to 5%.
Impact of the Upcoming US Election
The November US election between Donald Trump and Kamala Harris will define the final quarter, potentially introducing more market volatility. Investors will closely follow remarks from regional Fed presidents Bowman, Bostic, Barkin, and Williams throughout the week.
Federal Reserve Rate Cut Signals Shift to Accommodative Monetary Policy!
