The first full week of October promises to be an interesting one. Investors are awaiting several key macroeconomic releases, including data on employment change in the United States.
According to the market consensus, the US employment report (NFP) is likely to show an increase of 500 thousand jobs in non-farm sectors in September.
Important economic data and central bank decisions
Recall that August data disappointed and raised concerns about the pace of labor market recovery amid rising COVID-19 cases, while ISM PMI may show that September turned out to be another month of strong growth in the service sector. Investors may pay close attention to any signs of rising inflationary pressures.
In Europe, key economic data includes retail sales and producer prices in the Eurozone, industrial production and trade balance in Germany, while central banks in Poland, Australia and New Zealand will make monetary policy decisions. On the UK economic calendar, the week could be quiet, with investors likely to pay attention to the Halifax house price release and Markit Construction PMI.
Epidemic slightly reduces the chance of rate hike
Aforementioned Australia and New Zealand are the destinations to watch out for in the coming days. The Reserve Bank of New Zealand is likely to raise its main interest rate by 25 basis points from 0.25 percent to 0.5 percent, but the chances of a hike, according to Bloomberg, diminished slightly as authorities extended the lockdown in Auckland to contain a new outbreak of coronavirus. The interest rate market is pointing to an 80 percent chance of a rate hike at Wednesday's meeting. As recently as Friday, the probability was 86 percent.
Investors may also be keeping an eye on the OPEC+ meeting, where major oil producers are likely to maintain a steady pace of supply increases as oil prices remain at three-year highs. A barrel of WTI crude costs above $75 this morning.
Daniel Kostecki, Conotoxia Ltd.
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