Market Outlook for the Coming Week: NFP and G20 in the Spotlight

As August concludes, markets brace for a data-packed start to September. A confluence of key economic indicators, central bank signals, and high-level international meetings is set to define trading sentiment and direction in the week ahead.

Monday, Sep 2: G20 Kick-off and China PMI

The week opens with Asian data and global policy dialogue. China's August official Manufacturing PMI will offer fresh clues on the recovery momentum of the world's second-largest economy. Concurrently, the G20 Finance Ministers and Central Bank Governors meeting commences, running through September 1st. Policymakers' communication is under scrutiny amid slowing global growth and divergent inflation pressures.

Tuesday, Sep 3: Data Deluge from Europe and the US

Tuesday is a data super-day. In Europe, final August Manufacturing PMIs from France, Germany, the UK, and the Eurozone are due, alongside the Eurozone's flash CPI and July unemployment rate, all crucial for ECB policy expectations.

The US spotlight is even brighter:

  • Labor Market: July JOLTs Job Openings will gauge the tightness of labor demand.
  • Manufacturing Health: The August ISM and S&P Global Manufacturing PMIs will paint a full picture of factory activity.
  • Others: July Construction Spending reflects investment heat in the housing sector.

Earnings from Nio and Dell (after the bell) will also draw attention.

Wednesday, Sep 4: Central Bank Decisions and Jobs Preview

Two central banks take center stage on Wednesday. The Reserve Bank of New Zealand and the Bank of Canada will announce their rate decisions, with BoC Governor Macklem holding a press conference. Their nuanced guidance is key in an environment of receding inflation but resilient economies.

Data-wise, the US August ADP employment report (“small NFP”) provides a key preview for Friday's main event. Australia's Q2 GDP and US crude inventory data are also on watch.

Thursday, Sep 5: Services PMIs and the Fed Beige Book

Thursday's focus shifts to services and the Fed. Final August Services PMIs for the Eurozone and its major economies are due, alongside the US ISM Non-Manufacturing PMI, to see if the dominant services sector maintains expansion.

The Fed releases its Beige Book, compiling anecdotal economic evidence from its 12 districts, setting the stage for the September FOMC meeting. Weekly Initial Jobless Claims and the July Trade Balance are also on the docket.

Friday, Sep 6: The Week's Main Event – US Non-Farm Payrolls

Friday hosts the week's headline act. The US Labor Department releases the August jobs report, featuring three core metrics:

  • Non-Farm Payrolls Change: Measures the number of new jobs created.
  • Unemployment Rate: Assesses overall labor market slack.
  • Average Hourly Earnings Growth: Gauges wage inflation pressure.

This report will significantly influence market pricing of the Fed's future rate path, with direct impact on the USD, Treasuries, and global risk assets. Canadian employment, Eurozone retail sales, and speeches from central bankers add to the day's volatility.

Weekend Watch

On Saturday, markets will eye the US oil rig count for insights into shale production activity. Additionally, Saudi Aramco typically announces its Official Selling Price (OSP) around the 5th of each month, a key benchmark for global crude pricing.