The start of September brings with it the first Friday of the month which can mean only one thing, as far as markets and traders are concerned. The monthly US jobs report has historically been the biggest risk event on the calendar, albeit with CPI data perhaps edging it out in recent years. But with Fed Chair Powell recently emphasising that risks to the job market were rising, NFP will once more take centre stage.

After the huge revisions to the May and June headline prints (and subsequent sacking of the BLS head), Powell’s head was turned, and a high bar has been set for not reducing rates at the FOMC meeting in a few weeks time.  The three-month headline print average is now just 35k, so the chance of a negative reading is real. Surveys remain muted while the jobless rate would now be above 4.5% if participation had not fallen in recent months. As is the norm, we get other employment data like JOLTs and ADP in the build-up to Friday, which will skew estimates for the headline NFP print.

A negative number would likely see rate cuts priced in for the three remaining FOMC meeting in September, October and December. The White House and dovish Fed officials will no doubt be out in the force to reinforce this message, with just two currently fully priced. Dollar bears will eye the late July lows ahead of the multi-year bottom on the Dollar Index chart at 96.37. A long-term upward trendline from the 2011 low comes in around here as well. Gold bugs will eye up all-time highs at $3,500 after the upside breakout last week. That saw the best weekly gain for bullion since early June.

Eurozone inflation will also be a focus that kicks off the week. It has been comfortably around the ECB’s target for some time now and is forecast to remain relatively steady in the months ahead. That said, core inflation is still too high at the moment, and recent survey data continues to suggest that services inflation will trend above target in the months ahead. An appreciating currency could cause some disinflation but EUR/USD has tracked sideways in recent weeks in a 1.1574-1.1742 range. The 50-day SMA is a pivot point at 1.1661. 

In Brief: major data releases of the week

Tuesday, 2 September 2025

– Eurozone CPI: Consensus sees the headline unchanged at 2.0% and core one-tenth lower at 2.2%. Services inflation remains too high, but a stronger euro would pose risks of an inflation undershoot. The ECB sees prices stabilising over the medium-term.

– US ISM Manufacturing: August manufacturing activity is expected to tick up to 48.8 from 48.0 as firms slowly come to terms with levies. Factory conditions continue to improve but cost pressures and geopolitical uncertainties linger.  

Wednesday, 3 September 2025

– Australia GDP: Consensus expects Q2 growth of 0.5% as the recovery stalled in the first half of 2025. Economists say the extent of the pullback in public demand has surprised on the downside. A soft print would reinforce the fragile growth backdrop and support market expectations of further RBA easing into year-end. Markets currently price around a 20% chance of a September 25bps cut, with November’s meeting around fully priced. AUD/NZD spiked to 6-month highs last week at 1.1123 but is overbought.

Thursday, 4 September 2025

– US ISM Services: August non-manufacturing ISM is forecast to rise to 50.5 from 50.1. Consumers remain surprisingly resilient with solid domestic demand and modest export growth forecast to add support, even as price pressures remain elevated.

Friday, 5 September 2025

– US Non-Farm Payrolls: Consensus expects 75k jobs added, close to the prior 73k. Watch revisions after the -258k to May and June. The unemployment rate is predicted to tick one-tenth higher to 4.3%. Wage growth is seen steady at 0.3% m/m. Fed Chair Powell highlighted downside risks to the labour market at Jackson Hole, cementing a 25bps September rate cut.

– Canada Jobs: The labour market snapped back to reality in July, losing over 40k jobs compared to the addition of 83k in June. The unemployment rate remained steady at a near multi-year high at 6.9%. More job losses in sectors reliant on trade will be in focus. USD/CAD has fallen as US/Canada swap spreads have dipped to the narrowest since last October. The 100-day SMA, recent support/resistance, at 1.3766 got broken last week to the downside.