Forecasting the upcoming week: It will be all about Payrolls… and Powell

Another dreadful week for the Greenback. In fact, investors remained largely sellers of the US Dollar on the back of increasing perceptions of further easing by the Federal Reserve for the remainder of this year and 2025. In addition, the likelihood of a soft landing of the US economy combined with extra rate cuts bode well for the risk-on sentiment, remaining a persistent threat to any attempt of recovery in the Dollar.

The US Dollar Index (DXY) retreated for the third consecutive week, this time clocking a new 2024 low just above the psychological 100.00 level. On September 30, the Chicago PMI is due along with the Dallas Fed Manufacturing Index. The final S&P Global Manufacturing PMI comes on October 1, seconded by the ISM Manufacturing PMI, JOLTs Job Openings, Construction Spending, and the API’s report on US crude oil inventories. The ADP Employment Change takes centre stage on October 2, seconded by weekly Mortgage Applications, and the EIA’s report on US crude oil supplies. On October 3 comes the usual weekly Initial Jobless Claims, followed by the final S&P Global Services PMI, Factory Orders, and the ISM Services PMI. Closing the week, the Nonfarm Payrolls take centre stage on October 4, along with the Unemployment Rate.

EUR/USD advanced for the second week in a row, including a move to fresh 2024 peaks beyond 1.1200 the figure, always on the back of the improvement in the risk complex and the selling pressure in the US Dollar. Import Prices in Germany are due on September 30 along with the preliminary Inflation Rate. On October 1 comes the final HCOB Manufacturing PMI in Germany and the euro area. Next on tap will be the Unemployment Rate in the euro bloc on October 2, while the final HCOB Services PMI in Germany and the bloc are expected on October 3, seconded by EMU’s Producer Prices. On October 4, the HCOB Construction PMI is due in Germany and the euro zone.

GBP/USD remained on a positive path, advancing for the third consecutive week and reaching levels last seen in March 2022 past 1.3430. The UK’s Current Account results will be published on September 23, seconded by the final Q2 GDP Growth Rate, Business Investment, Mortgage Approvals, Mortgage Lending, and the BoE’s M4 Money Supply. The final S&P Global Manufacturing PMI is due on October 1, while Nationwide Housing Prices are expected on October 2. On October 3 comes the final S&P Global Services PMI, and the S&P Global Construction PMI is due on October 4.

USD/JPY is about to reach its third month in a row of losses, all within the broader multi-week decline that started in July. Japanese Industrial Production, Retail Sales, Housing Starts, and Construction Orders are all due on September 30. The Unemployment Rate, the final Jibun Bank Manufacturing PMI, and the BoJ Summary of Opinions are expected on October 1, while the Tankan survey takes centre stage on October 2. The final Jibun Bank Services PMI comes on October 3, seconded by the weekly Foreign Bond Investment figures.

An outstanding weekly performance saw AUD/USD advance past the 0.6900 barrier for the first time since February 2023. Australian Housing Credit results and Private Sector Credit are expected on September 30. The final Judo Bank Manufacturing PMI is due on October 1, followed by preliminary Building Permits, Retail Sales, and Private House Approvals. The Ai Group survey comes on October 2, while the final Judo Bank Services PMI and Balance of Trade figures are due on October 3. Home Loans and Investment Lending for Homes are next in Oz on October 4.

Anticipating Economic Perspectives: Voices on the Horizon

• The Fed’s Powell and Bowman will speak on September 30 along with the ECB’s Lagarde, and the BoE’s Greene.
• The Fed’s Bostic and Cook are due to speak on October 1, followed by the ECB’s Schnabel and Nagel, and the BoE’s Pill.
• The Fed’s Barkin, Bostic, Collins, Bowman, Musalem, and Hammack will speak on October 2, along with the ECB’s De Guindos, Buch, Elderson, Lane, and Schnabel.
• The Fed’s Bostic speaks on October 3.
• The Fed’s Williams is due to speak on October 4, followed by the ECB’s Elderson, De Guindos, and Buch.

Central Banks: Upcoming Meetings to Shape Monetary Policies

• The Polish central bank (NBP) meets on October 2.